Strategy

The CEO Poll: The Great Recession

Canadian business leaders expect no quick economic recovery.

Business leaders give the federal mini-budget high marks.

The global economic meltdown will last far longer than generally predicted because we’re facing “a crisis of excessive debt,” as Harvard historian Niall Ferguson puts it.

In a recent web poll conducted by COMPAS Inc., the majority of 126 respondents agreed with Ferguson and other doomsayers that some countries are already experiencing depression-like conditions, that globalization could unravel as trade protectionism re-emerges, that the Canadian economy is vulnerable due to its high volume of exports to the U.S., and that struggling Canadian companies could be gobbled up by rich predators like foreign sovereign wealth funds. But far fewer CEOs think the Great Recession, as most of them prefer to call it, will lead to widespread destabilization and civil wars.

“Governments are being more proactive, largely because of memories of the Great Depression,” wrote one respondent. “Hate to think where we’d be if we hadn’t had that earlier lesson.”

But some CEOs don’t agree with the methods governments are using to stimulate their economies. “Unfortunately in many countries, and in particular the U.S.A., we are embracing a policy of ‘fix it right now and let’s do it with taxpayers money,’ ” said one panelist. “Policy-makers want to stimulate the economy by incurring massive government debt and have their citizens, already overburdened with debt, have easy access to more debt to enable them to spend their way out of this recession. This policy will only end in disaster and will result inshortening the time to the next and more severe downturn.”

Other respondents were more upbeat. “The savings rate jump in the U.S. is a clear indication of slowing down expenses,” wrote one. “That, in the medium term, is a good sign. Savings need to be invested; perhaps not in equity markets but in more secure investments. That is good for governments (bonds) and banks (deposits).” However, the CEO added, “You need income to be able to save. Jobs need to come back to achieve a faster growth cycle. That is what governments need to concentrate on.”