Dr. Lynn Reaser Visits Federal Reserve

Dr. Lynn Reaser Visits Federal Reserve for NABE Board of Directors Meeting

PLNU Chief Economist, Dr. Lynn Reaser, met with the Federal Reserve Board of Governors on Friday, November 13th in Washington D.C . Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System, led the meeting in the Boardroom of the Federal Reserve headquarters where major monetary decisions were made. The NABE Board of Directors meets with the Federal Reserve Governors periodically to share views and insights on their economic perspectives of the conditions in their own industries and developments in their particular regions.

The discussion lasted an hour with an exchange of questions and answers with all specific information given in confidence.

Pictured Left to Right: Ben Bernanke, Rich Wobbekind, Lynn Reaser

Water- Meeting our Destiny

Economist’s Corner- Water

Lynn Reaser, Ph.D.

Chief Economist, Point Loma Nazarene University

Indulging in free or cheap water is not an inalienable right.  While some might believe that long showers are essential to life, liberty, and the pursuit of happiness, that view is truly a stretch.  Water is a good like any other.  It is a scarce resource and should be treated as such.

Solving the Problem

Three approaches exist to meet our water challenge:  regulation, moral suasion, and pricing. Regulation involves rationing or limiting water consumption by restricting lawn watering, car washing, or other activities either in terms of time of day or amount.  Its enforcement is often spotty, frequently putting the onus on neighbors to report violators.  This is clearly an inefficient means of reducing water usage.  Moral suasion relies on peoples’ belief that they “should do the right thing.”  While laudable, results can often by uneven and not enduring.  Much of the reduction in water consumption recently experienced in San Diego reflects the impact of the recession.  Once recovery resumes, habits may revert largely to their prior ways.

Pricing water to reflect its cost is a simple and straightforward solution.  Households and businesses will adjust their behavior and reduce their consumption because it is in their own best interest.  No policing is necessary either from neighbors or city officials.  Water conservation no longer relies on people searching their social and moral conscience each time they turn on the tap.

Pricing a Scarce Resource

Economics 101 teaches that a good priced too low encourages wasteful consumption and inadequate investment in infrastructure.  Water has clearly been priced this way.  Is it any surprise that we have a “crisis” developing?

An optimal solution would be to price water at its marginal cost.  That would clearly cost buyers of large properties with extensive lawns or agricultural interests dearly since they had made their purchases on very different assumptions.  The proposal of setting “base” usage amounts related to property size and number of residents represents a compromise solution.  Basic water rates would be applied to those usage rates, with progressively higher rates charged for water consumption exceeding those levels.

These tiered rates would induce major shifts in behavior, with homeowners transitioning to smaller lawns or landscapes more appropriate to San Diego’s indigenous climate.  This would be an important step since about half of all domestic water consumption is used for outdoor landscaping.  More efficient pricing can prevent a water “crisis.”

The Buck Stops Here- Or Does It?

Written by Dr. Lynn Reaser, PLNU Chief Economist

The U.S. dollar has fallen 8% during the past six months while gold prices have soared.  What has caused the greenback to slide, who will be impacted, and what is the outlook?

The dollar peaked early in 2002 and has trended lower over the last several years.  This was the market’s response to a large trade and current account deficit.  By making exports more competitive and imports more expensive, this corrective process has helped to shrink deficits from their previous highs.  The dollar did rise briefly last year as anxious investors sought the safest asset in the world—short-term U.S. Treasury bills.  Emerging confidence in an economic recovery and the move of investors into riskier stocks and bonds has helped push the greenback lower again in 2009.

Is a weak dollar good or bad?  It depends where you stand.  Exporters benefit from a cheaper dollar as do multinational firms, who account for more than half of the profits of the S&P 500 firms.  Companies like Procter and Gamble or Coca Cola gain as their earnings from abroad are translated back into dollars.  U.S. investors who invest in foreign stocks, bonds, or mutual funds also win as their overseas gains buy more dollars when they are brought home.  In contrast, tourists traveling abroad will find it more expense and U.S. consumers could see higher prices for some imported goods.

Foreign investors now hold slightly more than half of our Treasury debt.  While there is little risk that they would sell large amounts of our debt because of the possible damage to their own portfolios, higher interest rates and a weaker dollar may be necessary to coax continued foreign financing of our budget deficit.  A precipitous slide in the dollar’s value does not appear likely, but further weakness can be expected.

An Alumnus’ Story of Success and Hope

From a bleak diagnosis to a bright future, Erik Weber’s story is an inspiring one.

At the age of three, Erik Weber was diagnosed with autism. Doctors informed his parents that he would reach the mental development of an 18-month-old, at best, and recommended seeking out an institution at which Erik could live his life. Erik’s parents, however, had hope in a different future for him.

The journey to that future has not been easy. Unfortunately, Erik’s family was struck by tragedy when he was eight years old. His father, Richard, died unexpectedly during a business trip to Turkey.

Despite the many challenges they have faced, Erik and his mother have persevered, and Erik has excelled beyond the doctors’ expectations. In 2006, he graduated high school from San Diego’s Excelsior Academy; in 2008, he graduated from Grossmont College with an associate degree in general education. He graduated from both institutions with a GPA above 3.5. Most recently, he has graduated Summa Cum Laude (GPA of 3.9 or above) from PLNU with a major in International Development Studies and was inducted into the Phi Delta Lambda Alumni Honor Society. The Fermanian School of Business also named him the International Developmental Studies Student of the Year for 2009.

Outside of academics and PLNU, Erik has been busy with additional interests as well. He is a Special Olympics gold medalist, and, in 2008, he published a book titled “Autism for Dads: The Importance of a Father’s Love”. He has been featured in various newsletters and articles and will be interviewed for a “Salute to Teachers” special on San Diego’s local Channel 4 television station, airing in October. He also has taken part in research studies and has been a guest speaker in special education classes. Most recently, the San Diego City Council honored Erik by naming July 14, 2009, “Erik Weber Day” in San Diego.

Erik’s future continues to look bright and full of exciting opportunity. This fall, he will begin a graduate program at San Diego State University for a Master’s in Public Administration. His career goals are in the field of international business.

In a recent interview with Erik’s mother, Sandy, she expressed the deep love and appreciation which she and Erik have for PLNU. They feel the university has done much to help transform their dream of Erik earning his bachelor’s degree into reality. She said they frequently tell other families with disabled children about their wonderful experience at PLNU. She spoke of her sadness in having to leave the “haven” that PLNU has been, but she said Erik will have continuing pride as an alumnus of PLNU. At many of Erik’s public engagements, he can be seen wearing a PLNU pin or shirt, proudly representing his Alma Mater.

Executive Development Event: November 9, 2009

The Fall 2009 Executive Development Event

Featuring Dr. Lynn Reaser, Chief Economist PLNU, former Chief Economist of the Investment Strategies Group Bank of America and current President of the National Association for Business Economics.

You and a guest are invited to join us for an intimate dinner and conversation with Dr. Lynn Reaser as she shares about keys to success in the corporate world, the economic outlook in the near term and the risks as we move forward.

Please note: This event is for MBA students and PLNU Faculty Members only.

Date: Monday, November 9, 2009

Time: 6:00 PM

Location: Fermanian Conference Center

Cost: There is no cost to attend this event, but seating is limited to RSVP please visit the Fermanian Business Center website or contact Cathy Gallagher at cgallagh@pointloma.edu.

What are Executive Development Events?

The Executive Development Events are held once per semester exclusively for our MBAs and faculty, and provide a unique opportunity for our MBAs to enhance their personal and professional development. At these events, our MBAs and an invited guest enjoy an elegant dinner overlooking the Pacific Ocean at the Fermanian Business Center on the main PLNU campus. Following the networking and dinner time, a panel of business leaders with extensive executive experience discusse important topics to the MBAs. The EDEs are a “signature event” of the PLNU MBA experience, so make sure to attend the next one.

Economist’s Corner: Preventing the Next Financial Crisis

Written by Dr. Lynn Reaser
More than a year has now passed following the failure of Lehman Brothers, but we have little assurance that the specter of another collapse of our financial system might not appear on our doorsteps in the future.  Congress and the regulatory agencies are still debating various solutions.

Much of the discussion has focused on a consumer protection agency or limitations on executive bonuses.  While some of these discussions involve important issues, they are largely “sideshows” to what must be addressed.  The heart of the problem involves the following:  How do we prevent the bad decisions of one or two firms from jeopardizing the entire financial system?

Firms making bad choices should be allowed to fail or taken over by the FDIC if insured deposits are at stake.  Financial companies should not be allowed to become so large or important that their existence is essential to the functioning of domestic and global credit markets.  Capital requirements may be the most effective way to limit size and excessive leverage.

Ultimately, companies and investors must be held accountable for the risks they undertake.  No institution should be exempt from that standard.

Professor Rob Gailey Presents Paper in Stockholm

The Bank of Sweden Tercentenary Foundation’s sector committee for research on the civil society, KTH (Royal Institute of Technology) and Jönköping International Business School organized an international workshop on the theme Civil society, social capital and economic development to further the understanding of this particular theme. The workshop was held in Stockholm 3-4 September 2009. An anthology with selected revised workshop papers was planned. Professor Robert Gailey, Director for Center of International Development at PLNU recently presented his paper on Social Capital and Economic Empowerment.

To view Professor Gailey’s paper that was presented in Stockholm click here.

Professional Development Event: Commercial Real Estate

The Fermanian Business Center and NAIOP
are proud to present

The Future of Commercial Real Estate

Date:	Monday, October 19, 2009
Location:	Burnham Event Plaza, Boardroom & Conference Center
Time:	6:00pm – 8:00 pm

Moderator:

Mr. Bob Harp

Adjunct Professor of Real Estate, PLNU
President, Global Hospitality Resources, Inc

Panelists will include Board Members of NAIOP

Brigham Black

Pacific Office Properties Trust

Chris Pascale

Senior Vice President, CB Richard Ellis

Pat Gravitt

Director of Real Estate, Qualcomm

Kurt Huppert

Union Bank

Businesses and Students, to RSVP click here.

NABE Press Release: Reaser Elected to Presidency

Excerpted from the National Association for Business Economics October 13, 2009 Press Release

REASER, WOBBEKIND ELECTED TO TOP POSTS AT NATIONAL
ASSOCIATION FOR BUSINESS ECONOMICS

ST. LOUIS, MO—The National Association for Business Economics (NABE) has elected Lynn Reaser, chief economist at Point Loma Nazarene University, as president for 2009-2010, and Richard Wobbekind, Executive Director of the Business Research Division and associate dean of the University of Colorado-Boulder MBA and Executive Programs, vice president of NABE. Both will take office October 13, at the close of the NABE Annual Meeting in St. Louis.

“NABE has a long history of excellence” Dr. Reaser said. “I look forward to working closely with the leadership to implement new initiatives which will enhance both the value of the NABE membership and, ultimately, the career paths of our members.”

Dr. Reaser will focus on several priorities during her term as president, including launching a new NABE career Web site, expanding upon NABE’s educational offerings, and increasing outreach to students and young professionals. Dr. Reaser also endeavors to enhance NABE’s relationships with colleges and universities and advance efforts to increase NABE’s international presence.

Prior to joining Point Loma Nazarene University in San Diego on August 1, Reaser served as chief economist for the Investment Strategies Group at Bank of America in Boston. Her other previous positions include chief economist at Barnett Banks, Inc., and chief economist at First Interstate Bank. A native Californian, Dr. Reaser has been active in NABE since earning her bachelor’s, master’s, and PhD degrees in economics at the University of California at Los Angeles. Elected to NABE’s Board of Directors in 2006, she has also served as president of the Los Angeles, CA, and Jacksonville, FL, NABE Chapters, has co-chaired the 2008 Annual Meeting Committee, and was a member of the 2007 Annual Meeting Program Committee.

For the full story visit http://www.nabe.com/press/pr091013officers.pdf

National Association for Business Economics- St. Louis Conference

Live from St. Louis! Is it “Happy Days are Here Again!” or is it “The Lost Decade?” Two distinctly different views are being posited around the National Association for Business Economics annual conference. Our own Lynn Reaser, newly installed President of the NABE, is taking a primary leadership role at what may be the most tumultuous economic era in modern history. Our famous “dashboard indicators” for economics and business are giving off widely variant signals, and the stakes couldn’t be higher for all of us. Look for some comments and opinion from all of us attending the NABE (Reaser, Gallagher, Munoz, Bailey, Schooling and Ataide) in coming posts. The impact of clear economic thinking for good business, career and policy decisions has never been more important and PLNU will be a major voice in shaping the dialogue.

-Randy M. Ataide

Dr. Lynn Reaser being interviewed by Bloomberg Radio at NABE Conference