Zandi sees lack of hiring as U.S. recovery's biggest risk

You may never see his mug on the cover of a tabloid at the supermarket checkout line, but Mark Zandi is as close to a celebrity as economics gets.

The chief economist of Moody’s in West Chester gets quoted in publications large and small, testifies before congressional committees, and counsels presidents and candidates.

He’s popular because he uses English rather than economlish, and he says what he thinks.

I heard him speak at two different events in Philadelphia this month alone. The first was a panel discussion at the Federal Reserve Bank of Philadelphia March 3. The second was a speech to the World Affairs Council of Philadelphia at the Union League Monday evening.

Yet Zandi used the same clear language to explain his views on economic stimulus, health-care reform and jobs. I didn’t have to reach for a textbook to catch his drift.

Zandi said he doesn’t think the current health-care reform effort will have any significant economic impact. While the bill does insure much of the uninsured, it barely pays for itself in doing so. Most important, it doesn’t lower the growth of health-care costs long term.

The biggest risk to the economy is lack of hiring. Policymakers should “err on the side of doing too much rather than too little,” he said.

While the burgeoning U.S. budget deficit is worrisome, tightening policy too soon could be disastrous. “We’ll go back into recession, and if we do, we’re not coming out for a long time,” he said.

Still, Zandi did leave Monday night’s crowd with an uplifting thought.

The biggest age group in the United States right now is 50-year-olds, followed by 19-year-olds. To Zandi, that bodes well for Philadelphia. Why? The fiftysomethings are on the cusp of needing more health care, while the teens are prime customers for higher education.

And what are Philadelphia’s biggest industry sectors? Eds and meds.

“We are geared for growth for the next 10 years,” Zandi said.