The US economy: where we might be headed

3M Hispanic Organization for LeadershipMarch 2, 2010 / Dr. Michael Brandl

3M Innovation Center - Austin

Overview Who I am

Economist with McCombs School of Business Managerial Economics – daytime MBA, Evening

MBA, and Executive MBA programs in Austin LLILAS (Teresa Lozano Long Institute of Latin American Studies)

Today Where the US economy is How we got here Where we might be headed

Improving GDP…but

Unemployment problems…

Consumer confidence

How we got here…US in 2000

2007

How did we get here

Everyone together now…

Where are we headed? The need for reasonable debt level.

Households are over indebted and don’t save. This will change…has it already started?

Households will probably start to save more. Easy credit will no longer be available to households.

More capital available… Different spending habits…

Restructuring financial markets Government debt levels remain a worry.

Greece just dodged a bullet…who is next? US needs to worry about this.

Aging baby boomers

Lessons for managers Asset bubbles happen.

“Irrational increase in the market price of an asset.” Very difficult to spot them when they are

happening… Even though there is a long history of them. Denial: “This time it’s different…”

When the pop, the masses can be massive.

But…benchmarking encourages it. Better to suffer in company…right?

More lessons… Markets will punish stupidity.

Short term thinkers…are doomed. The need to understand and appreciate change. Silo thinking is dangerous…and will be punished.

Markets are great things…but brutal. And that is why we will do well… The future will be very different from today and

the past… It is already changing…

Questions & AnswersFeel free to ask anything!

Michael.brandl@mccombs.utexas.edu

http://blogs.mccombs.utexas.edu/brandl

Twitter: MichaelBrandl

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