WATERVILLE — Even as the global financial crisis deepens and recovery in the U.S. sputters, the solutions for economic recovery are still very much do-able and are pretty straightforward.

Problem is, political interests around the world and here at home are standing stubbornly in the way of the common good.

Those were among the conclusions drawn at a Colby College forum Thursday night featuring the insights of three alumni who are in the thick of economic decisions in the public and private sectors. The forum, moderated by government professor Sandy Maisel, attracted an overflow crowd to Ostrove Auditorium.

The forum panelists — Bob Diamond, chief executive officer of Barclays PLC, Tom Riley, president of SeniorLink, and Eric Rosengren, president of the Federal Reserve Bank of Boston — all ultimately exuded optimism that the U.S. economy can come roaring back, despite the slowdown.

“I’m here to tell to you the world isn’t going to end tomorrow,” Riley said.

Maisel said he polled Colby students and faculty earlier in the day and came away with common areas of concern: the unemployment rate remaining over 9 percent; the job market; and dwindling public confidence in the economy and government institutions.

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Though the panelists all settled on an optimistic outlook, they each raised different concerns about the roadblocks to recovery as they responded to questions from Maisel and audience members.

Diamond raised worries about a lack of leadership in both Europe and the U.S., saying politicians are being driven largely by local elections and are losing sight of the economic steps that need to be taken. What’s certain, he said, is that the U.S. must grapple with reducing public spending while getting a handle a deficit that’s growing by $1 trillion a year.

Diamond repeatedly stressed his prescription.

“We have to pass the mantle of growth to the private sector,” Diamond said. “It’s the private sector that made America great.”

Riley, who joked that he was an entrepreneur conveniently seated in between a banker (Diamond) and a regulator (Rosengren), said that his two health-care-related companies have hired 500 people during the last three years. He said job-creating entrepreneurs will be key in the recovery, as will investments in education.

Rosengren outlined several recovery roadblocks. The U.S.’s economic woes may not be as large as those in Europe — most notably in the United Kingdom, Greece, Spain, Italy and Ireland — but global markets are still affecting the U.S. and yet “out of our control.”

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Addressing slow economic growth in the U.S., Rosengren said the pace of growth is about the same as it was in the aftermath of the last three recessions. But the big difference this time is a nosedive in the housing sector and American consumers are spending about half as much as would typically be expected, Rosengren said.

But if the U.S. can reduce its debt and quicken the pace of growth, “I think in the long run, the U.S. economy has a very robust opportunity to grow more quickly,” Rosengren said.

Diamond these problems are very solvable — “there’s a playbook here” — but political interests are getting in the way. For example, he pointed to the fight between President Barack Obama and Congressional Republicans this summer over increasing the debt ceiling, which Diamond said was extremely negative for business confidence.

Taxes are in need of reform, he said, suggesting that business tax rates should be lowered from 35 percent to 15 or 20 percent, while eliminating exemptions that enable some large businesses to pay little or no taxes.

Rosengren cited Federal Reserve Chairman Ben Bernanke, who has recently raised concerns about the growth of debt in proportion to gross-domestic product. What’s needed are responsible reductions in the cost of the country’s entitlement programs, not draconian austerity measures, and more fiscal stimulus, Rosengren said.

The responsibility for recovery should fall to everyone, not just political leaders, Diamond said. He acknowledged that the “severe” impact on the reputation of the financial services industry in the aftermath of the Great Recession.

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Diamond recalled being in Washington in 2009 during negotiations over the Dodd-Frank Wall Street reform legislation, and he was speaking with Larry Summers, then-director of the White House’s National Economic Council. Summers turned to Diamond and asked if banks could be “better citizens.”

Before Diamond could answer yes, Summers answered for him, wryly adding: “But they won’t believe you.”

Yes, financial regulation was needed in the wake of the economic meltdown, Diamond said, but now he worries about extremes: over-regulation and over-reaction that could stifle the recovery.

Maisel conceded that the country’s political system appears “broken” — politicians are widely prone now to be at either end of the political spectrum and unwilling to compromise.

“Who’s looking out for the common good?” Maisel asked.


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