STEUBENVILLE - The state of the U.S. economy was discussed during the Friday luncheon meeting of the city Rotary Club at the YWCA on North Fourth Street.
Jerome Schmitt, executive vice president for WesBanco Corp., told Rotary members he doesn't believe the current recession and debt crisis in Europe will have significant consequences for the U.S. economy.
"(The European Union) has done a lot to isolate the banking system," said Schmitt, adding Greece's debt crisis has resulted in a negative view of European finances. "The Greeks feel austerity isn't working.
Mark J. Miller
ECONOMY DISCUSSION — Jerome Schmitt, executive vice president with WesBanco Corp., talked about the short- and long-term state of the U.S. economy during the Friday luncheon meeting of the Steubenville Rotary Club at the Steubenville YWCA.
"I don't feel the turmoil in Europe is going to affect the U.S. much," continued Schmitt. "Only about 3 percent of our economy is at risk because of the recession in Europe."
Schmitt also said the U.S. economy currently is healthier than most people think.
"The government is under a lot of pressure and will continue to be," he said, adding the U.S. government is shedding some debt while income tax collections have recently increased. "The economy isn't as weak as the media would have you believe."
Schmitt said private and corporate income tax totals collected by the federal government have risen, while debt accumulated has fallen.
"Clearly, things are going in the right way - just not fast enough," he said.
Schmitt said since the economic downturn of 2009, consumers have been paying off their debt, and the tight credit market has eased.
"If the economy isn't getting better, why is credit growing as fast as it is?" he asked, adding that statistics show "the economy is a lot better than many people believe."
He said that the Supreme Court's pending decision on the constitutionality of the Patient Protection and Affordable Care Act, known informally as Obamacare, may have an effect on hiring, adding some people believe the federal law's mandates already are slowing employment growth.
"We should have a decision (by the Supreme Court on the law) in the next 30 days or so," said Schmitt.
The banker also told Rotarians changes in global economies and emerging markets are making the U.S. manufacturing base more competitive on world markets. He added the U.S. also has become less reliant on foreign energy sources and is using less energy than before the economic crisis.
"You're seeing a big change in our energy production," Schmitt said. "Natural gas is two to three times as expensive in Europe and Asia as it is in the United States."
Schmitt added that a surplus in oil production is coming, and at some point global oil production would be greater than global demand. He also predicted oil prices would continue to drop "as long as things in Iran don't blow up."
He cited statistics showing U.S. consumer confidence is rising overall, and the U.S. stock market is healthier than believed, although the housing market still hasn't fully recovered. He also cited Apple Corp. and its recent profits as an example of as company doing well in the stock market and with shareholders.
Schmitt warned there were dangers ahead, and the dysfunctionality of the federal government could bode for rocky economic times at the end of 2012.
"We don't even pass a budget anymore," said Schmitt, adding the bi-partisan bickering in Washington, D.C., was creating uncertainty for investors.