Life-Altering Lessons: A Structural Change Watch List

CHICAGO, May 11, 2011 /PRNewswire/ -- "A friend of mine once told me that, 'teenagers can make two kinds of mistakes: life-learning and life-altering. The key is to keep them from making life-altering mistakes, while still allowing them the room to learn from smaller, more manageable mistakes.'"  Chief Economist Diane Swonk asserts that grownups have already made plenty of both, necessitating structural rebalance on many levels.

View a video featuring Diane Swonk listing the major structural changes facing the U.S. economy, in the May issue of Themes on the Economy®. Read this month's issue. She points to challenging as well as encouraging areas:

• "The federal budget deficit must shrink. Both Republicans and Democrats appear to agree that the U.S. has a problem."  While there's little consensus on how to rein in the deficit, the tax code needs to be reformed and spending needs to be cut.
• "Inflation remains more of a three-to-five year threat, given the ongoing slack we are facing, in addition to signs that growth abroad is slowing."
• Increased financial regulation means that, "Consumer credit will be much more expensive and difficult to get for all but the most credit-worthy of borrowers."
• "The euro area is expected to remain unstable. The debt crises in Greece, Ireland, Portugal and Spain have revealed inherent cracks in the foundation of the euro area."  
• "Accelerating inflation and the resulting political instability threaten to derail the Chinese economy if left unchecked."  
• "The labor force will become much more diverse," in terms of both age and race, as baby boomers continue to work and children of immigrants typically stay in school longer.
• "Budget crises at the state and local levels will accelerate educational reforms...Everything from corporate partnerships to tuition vouchers is now on the table."

The U.S. will have to address the challenges ahead, or "find out that financial markets will more aggressively force change upon us, as they have in Greece," says Swonk, who forecasts better prospects for the remainder of 2011, with GDP exceeding 3% in the fourth quarter. She also predicts that any rise in Treasury rates this year will be uneven because global investors still seek U.S. government debt during uncertainty and flights to quality.

The May issue of Themes on the Economy® as well as archived issues can be found at mesirowfinancial.com.

Mesirow Financial is a diversified financial services firm headquartered in Chicago. Founded in 1937, it is an independent, employee-owned firm with more than $43 billion in assets under management and 1,200 employees in locations across the country and in London. With expertise in Investment Management, Global Markets, Insurance Services and Consulting, Mesirow Financial strives to meet the financial needs of institutions, public sector entities, corporations and individuals. For more information about Mesirow Financial, visit its Web site at mesirowfinancial.com.

SOURCE Mesirow Financial