Traverse City Record-Eagle

Business

November 17, 2013

Banker looks at economy

Mitchell Stapley, chief investment officer for Fifth Third Bank, gave Grand Traverse region business leaders an in-depth look at the economy this week at the Traverse City Area Chamber of Commerce’s 2014 Economic Outlook event. The following are highlights from his remarks:

- Financial markets — The financial markets are “on a tear” in 2014, Stapley said. The rise in the markets represent a renewed belief in the American economy globally. “Clearly, the performance of the equity markets this year is consistent with one of the things we’ve focused on: you want to be invested in America.”

- Detroit bankruptcy — “If there was ever a city that needed a Chapter 9 bankruptcy filing, it’s the city of Detroit,” Stapley said. “Think of what we could do as a state if instead of having Detroit as a drag, all of a sudden Detroit becomes a real source of economic vitality. The rest of the state is doing pretty well. It could do better if Detroit starts to pick up.”

- Affordable Care Act — “In terms of pure economic impact ... it doesn’t look like (its) percentage of GDP is a big

number, but it is a big number based on the uncertainty it is creating. People are losing healthcare that they have right now ... I’m just really uncertain, and I think a lot of other people are, that the Affordable Care Act is the answer.”

Tax code reform - “You hear a lot of people talk that the corporate tax rate is too high. Thirty-five percent on a margin basis. Well, no one pays it. Google has an effective tax rate of 2 percent. General Electric had $13 billion in revenue and had an effective tax rate of zero. That can’t go on like that. We have too regressive of a tax system. We need to broaden the base and bring it down and have certainty.”

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