By Walter Wright
Dr. William C. Freund, senior vice president and economist of the New York Stock Exchange, was the keynote speaker at the Spring 1984 meeting of the CAS. Here are some highlights of his speech, as reported by Mary Lou O’Neil in the August 1984 issue of the Actuarial Review, with some irreverent comments following each quotation.
“All forecasts are fallible but to err is human and to get paid for it is divine.”
His wisest comment?
“There is a serious and dark cloud on the horizon—the federal deficit. In 1984 the deficit is $180 billion and is expected to increase by $200 billion and more in the future. A deficit of $326 billion is projected by the Congressional Budget Office for 1989.”
Oh! The good old days!
“He offered the ‘Freund Plan’ to achieve the deficit reduction...raising taxes ($30 billion), reducing military spending ($30 billion), putting a lid on entitlement programs ($30 billion).”
The article doesn’t say whether he identified any potential political problems associated with his plan.
“The bases for his favorable long-term economic outlook include…the energy problem has been overcome.”
Wow! If only he had been right!
“On deregulation, Dr. Freund noted that financial services regulation developed over three periods of time: the Civil War; the Panic of 1907, which brought about the Federal Reserve; and the depression of the 30s which resulted in many regulations. He stated that these regulations no longer meet our needs. In fact, many are being circumvented and/or rolled back....”
In fairness to him, how could he have foreseen the mortgage crisis?
“In closing, Dr. Freund stated that the future will be more exciting, the status quo is over.”
He was right on this!