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Rosengren: Difficult times breed opportunities
By using recession as a time of change, New England will prevail
New England, like the United States, is trying to recover from a severe recession. While we are suffering less than states more exposed to housing and auto industries, many here are enduring hardship.
The problems we face are resolvable. With appropriate policies, the economy will begin to grow again. In our history, recessions created dislocations, but also opportunities. New Englanders have often used the urgency of difficult times to create new engines of growth. I would highlight a few areas where significant changes are occurring - and where opportunities may exist:
First, the financial services industry is in transformation. Our regulatory structure was created 70 years ago and is not nearly as adaptable as the financial system. Today, policy makers are shaping how the United States will regulate the financial system going forward. The challenge is striking a balance - meeting the need for more consistent, comprehensive oversight without stifling innovation. We will all be better off with appropriately funded firms able to allocate capital to its best uses.
Second, some neighborhoods in our cities lost 20 years of progress in the past two years. We need to work so hard-hit areas avoid extended periods of blight. Smart investments in workforce development, education, and community development are in everybody's interest - as all New Englanders are needed for the economy to grow.
Third, we have world-best colleges and universities, but they face smaller school-age populations, retirement of many faculty, and stresses from shrinking endowments. Higher education must remain one of New England's competitive advantages. We need our colleges, universities, and employers to become more integrated into our economy and labor force, so this region continues to attract and retain students who will create the future engines of growth.
Eric Rosengren is president of the Federal Reserve Bank of Boston.
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