Economists discuss 'jobless recovery' at campus forum

Two prominent economists spoke Thursday at the Monroe Bank's Third Annual Economic Forum at the Ruth N. Halls Theatre to discuss the current mutual fund scandal and the U.S. economy's "jobless recovery."\nCharles Trzcinka, the James and Virginia Cozad Chair of Finance at the Kelley School of Business, and Mark Vitner, vice president and senior economist with Wachovia Securities, delivered two separate addresses to the audience of about 200 people.\nMark Bradford, president and CEO of Monroe Bancorp, began the economic forum by thanking his colleagues for their support and introducing members of the bank's board. He also noted that Monroe Bancorp's stock price was trading at $16 and remarked that the economists were going to recommend "loading your portfolio with Monroe Bancorp stock."\nEd Gross, vice president and private banker, then introduced Trzcinka, a former senior economist with the Office of Economic Analysis of the U.S. Securities and Exchange Commission and has published numerous articles concerning mutual funds and institutional money management in Business Week, Money Magazine and The New York Times.\nTrzcinka remarked that he had originally suggested ethics as a possible topic, which was rejected by Gross who wanted Trzcinka to "talk for more than a few minutes." \nTrzcinka said that select mutual investors were accused by New York State Attorney General Elliot Spitzer of engaging in "two practices; one called late trading -- which is illegal -- and the other called market timing, which is not illegal, but is unethical." \n"In my view, I think of this as stealing," Trzcinka later added. \nTrzcinka observed that all of the accused mutual investors preferred to settle cases out of court and paid billions of dollars in fines and disgorgements to the Securities and Exchange Commission.\n"(While) costs appear to be large, the loss in confidence (in the financial markets) is costlier," Trzcinka said.\nThe next speaker was Vitner who has been quoted in The New York Times, The Wall Street Journal, Business Week and USA Today, and is a frequent guest on CNBC, CNN and "The NewsHour with Jim Lehrer."\nVinter suggested that the much touted "jobless recovery" is officially over. He predicted that the U.S. economy would add about 350,000 new jobs when employment data is released on June 4 and that 3.3 million new jobs would be created in 2004. \n"We have the broadest-based recovery that we've had in over 20 years," Vitner said. \nHe attributed the recovery in the U.S. economy to the Bush tax cuts, the stimulatory effects of increased defense purchasing and the easy money policy of the Fed.\nVinter also observed that 99 percent of jobs being sent overseas were low-paying unskilled jobs. \n"We have been losing the least productive jobs, and the reason why is because benefit costs have been rising faster than wages and salary," he said. \nFrank Kitteredge, who attended the economic conference, said he was pleased with the turnout of the forum and said those who attended learned a lot.\n-- Contact staff writer Daraius Dubash at ddubash@indiana.edu