Oct. 17--When you've got the front seat on an economic roller coaster, you're so busy covering your eyes that you're not exactly mapping out the ride into the next decade.

Who knows what happens when Michigan sees the next dip? Who has any energy left to plan for the next 10 years?

But Charles Ballard, professor of economics at Michigan State University in East Lansing, is hoping to steer conversations to thoughts about 2020 or 2030 and not 2010.

Ballard will be part of a panel discussing the economic outlook at noon Tuesday at the Detroit Economic Club meeting at Cobo Center, along with David Sowerby, vice president of Loomis, Sayles & Co.; WJR's Paul W. Smith and myself.

Sure, it would be reassuring to think the U.S. economy will continue to be on the mend.

We are seeing some signs that the financial crisis -- which continues to face troubling issues, such as high foreclosures -- isn't as dire as it was last year. The U.S. economy is working its way out of the worst downturn since the Great Depression. Some remedies, including parts of the stimulus package, did work.

Ballard said the U.S. recession hit bottom, but it could take all of 2010 and then some to regain the ground and jobs that were lost in the recession that began at the end of 2007.

Sowerby said he expects the U.S. gross domestic product to grow at an annualized rate of 2.5% in 2010, compared with a forecast overall decline of 2.5% for 2009.

"It's a recovery, but it's a tepid, below-average recovery," Sowerby said, adding that Michigan's economy will improve in the first half of 2010.

When it comes to Michigan's economic troubles, Sowerby said one should not underestimate the negative impact of having fewer corporate headquarters here.

About 20 years ago, Sowerby could choose from 145 public companies based in Michigan when calculating a Michigan-based stock index. Now, there are 85.

Several major bank holding companies were acquired by banks based in another state. Comerica Inc. chose to move its headquarters to Dallas. Some retailers went out of business.

Fewer headquarters mean top executives live and make decisions elsewhere.

The state needs a more competitive business tax, Sowerby said, but he stresses that changes in the business tax alone won't encourage the growth of more business.

Don't forget the future

Ballard is concerned that if people focus too much on the uncertainties of the next month, they won't focus on the next generation.

If state budget cuts involve disinvesting in education, Ballard said, the state could be worse off 10 years to 20 years from now.

"I can't believe it's a move in the right direction," Ballard said. "The payoff for education has increased dramatically."

Michigan has been undergoing a structural transformation -- not simply a recession -- for the past several years, he said. This transformation away from manufacturing means that the workforce needs to be highly skilled and educated, he said, to create more jobs here.

"Tail fins are not coming back," Ballard said.

For information about tickets to the panel discussion, call 313-963-8547 from 9 a.m. to 5 p.m. Monday or see www.econclub.org. Contact SUSAN TOMPOR: 313-222-8876 or stompor@freepress.com

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