State Legistlative Leaders Foundation

2009 Issues Summit

The Great Recession of 2008 and Beyond: An Opportunity for Leadership

March 5 - 7, 2009

The Wharton School
University of Pennsylvania
Philadelphia, PA
Program Schedule - final version (pdf)                  Participants have high praise  
                                                                      for SLLF Economic Program

"Quality presenters with very robust information to help us right now in the legislature."
-- Rep. Lynn Finnegan, Hawaii 

"This has been one of the best and most timely programs I have ever attended. It provided me with more in depth information on these issues. Excellent!"”
-- Senator Bob Stenehjem, North Dakota 

The United States of America and the world are in the midst of an economic crisis rivaled only by the Great Depression. Economies across the planet are faltering. Job losses continue to escalate. Pensions are evaporating and the people are losing faith in their futures.

But as we have heard so often, every crisis presents opportunities and the question before us is, how will we choose to respond to these opportunities? The choice is ours. We can continue to do the same things that have brought us to the brink of economic and civic despair, or we can, as we have in the past, come together, putting aside old alliances and conflicts, to face the crisis and create a better tomorrow.

This crisis provides an opportunity for leaders to rise up and to help forge a stronger, more engaged government; a government that balances our system of capitalism with the appropriate level of government regulation and oversight, that fosters the development of a new workforce better suited to the new economy that will be a major byproduct of this recession, and that restores the People’s trust in their government and the private sector.

And as was continually pointed out, state legislative leaders stand at the crossroads of this crisis. “…it is the decisions you make in your states that will in large measure determine our success or failure. To a very large degree, with you rests the future of our country.”

These were among the incisive observations offered by Professor Donald Kettl and his faculty colleagues at the Wharton School during the SLLF 2009 Issues Forum: Hard Times: Strategies for Governing in an Economic Crisis.

In early March, state legislative leaders from 25 state legislatures and business leaders from across the country, gathered on the campus of the University of Pennsylvania to discuss and debate the “hows and whys” of this economic tsunami and most importantly, what can and should be done to get out of it.

It was noted with eloquence and often wry humor that the causes of this economic meltdown are diverse and complex. Certainly Wall Street can lay claim to a great share of the blame. However, they must share the stage with lax or non-existent regulations and oversight at all levels of government and citizens all-too-willing to accept loans they had no ability or intention to repay.

Even our technology is to blame! Computers gave our banks and mortgage lending institutions (as we know now) a false sense of infallibility that their complex algorithms and computer models could accurately predict and control fluctuations in the market. At one point, there were almost as many theoretical physicists working on Wall Street as MBAs.

Finally, let us not forget our esteemed rating agencies with their AAA ratings based on faulty assumptions and careless accounting. Indeed, as Professor Mauro Guillen so mordantly pointed out, on the bottom page of every credit rating was a disclaimer that this rating should not be taken as proof of a company’s financial health. We were told we were getting unreliable information and we chose to ignore the warning!

Faced with a crisis of such magnitude, state legislatures are scrambling to balance budgets so out of balance that nothing short of a miracle—or truly courageous leadership—will help.

On just about every state legislature’s agenda are measures designed to decrease spending and raise revenues, and because of America’s inherent aversion to taxes, cuts and more cuts are being made in what were, heretofore, essential services like education, health care and even public safety. But as was pointed out by the Wharton faculty and echoed by legislative leaders and business leaders alike, the key to restoring our economy is jobs—job retention and job creation, and herein lies the true test of leadership.

America will look far different coming out of this long dark tunnel than it did going in. It will rest with visionary leaders to devise, nurture and invest in new technologies and new business models designed to retrain our work force and reinvigorate our economy. And as several legislative leaders noted, this is not an easy task for politicians who are used to quick fixes and immediately quantifiable results. Investing in the future is not what legislators do best, but, it is what they must do now.

Yet, despite all the doom and gloom, the final message was one of optimism and confidence.

The Wharton faculty reminded us of the dominance of the US economy in this interconnected world. We have suffered through far more serious economic downturns throughout our history, and our ingenuity and innovative talents are far from exhausted. Add to this the fact that we have the most open and free government in the world—one that rewards success and rarely accepts failure—and it is clear we possess all the necessary tools for coming out of this crisis far stronger than we have ever been.

It was a message that was not only well received but entirely believable.

If you have questions regarding the program, please contact Roberta Duane at rduane@sllf.org or Thom Little at tlittle@sllf.org.