The Fat Frogg, located just off Elon University’s campus, is usually more popular with trivia contestants instead of business professors. But Tuesday, Oct. 9, nearly a dozen professors sat in the establishment with a few students and locals to listen to professors Greg Lilly and Jen Platania give a talk titled, “Who’s in control – the president or the economy?”
In a 30-minute lecture on why the public is the real driving force behind the economy, Lilly and Platania began by showing the movie trailer of “The Tree of Life” to exemplify the elements of “nature” and “grace.”
“Can you take this struggle of grace and nature and apply it to societies?” Lilly asked.
He used the question to transition into a discussion about Einstein, who he described as a man of both nature and grace. According to Lilly, Einstein believed three things that support his own argument on the economy: man is a social being, a tightly controlled economy is necessary and man can be trained to follow grace, in the right conditions.
“What type of society has flourished?” Lilly asked.
He identified specific characteristics that allow groups to attain success, including political and economic choice.
“There needs to be a significant amount of economic choice and economic freedom,” he said, explaining this was preferable to a single plan or president.
Platania agreed with Lilly's statement. She suggested centrally planned economies are lower-performing than unplanned ones. She said households and businesses have a much higher impact on the national gross domestic product than government.
“Government plays a very small role,” she said. “The president has very little control over the economy itself.”
Platania explained that while the administration sets the tone, they don’t establish the path. She said it’s much more effective when Congress and the president are on the same page, saying there’s very little he can do without Congressional support.
There was also a discussion of the “fiscal cliff,” the time at the end of 2012 when many taxes are set to increase and spending is expected to decrease, but that the president is not the sole arbiter of the fate of the U.S. economy.
“We have to look beyond the president,” Platania said. “The greatest single person that has control of the economy is the chairman of the Federal Reserve, Ben Bernanke.”
Platania said Bernanke and the Federal Reserve have the power to act very quickly, controlling interest rates and money supplies.
“These are the things that really get the economy going,” she said, although she added even Bernanke said the Fed doesn’t have any control over the impending fiscal cliff.
Platania concluded by pointing out the economy isn't a representation of Washington or the president or the Federal Reserve, it is “you and me,” the day-to-day economic behavior of the American people.
No matter which candidate is elected in November, the economy will remain relatively unaffected on its slow path to recovery, they said.
This talk was part of the “Tectonic Plates: Alamance County’s Science Cafe,” a series of events that take place at Fat Frogg the second Tuesday of every month.