Opinions vary in outlooks for 2003

December 5, 2002

BY TAMMY WILLIAMSON Business Reporter

What will 2003 look like, economically and politically?

Even for some of the brainiest guys around, it's a tough call.

Three people with ties to the University of Chicago Graduate School of Business gave diverging viewpoints to reporters Wednesday in their annual outlook. Consensus was elusive, given that the United States may go to war with Iraq, and no one can predict with certainty whether the stock market will bounce back next year.

Robert Aliber, professor of international economics and finance for the business school, reads the future this way:

**The stock market is still overvalued, based on a study of past business cycles.

**The United States' growing dependence on imported goods will some day have devastating consequences for the U.S. dollar's value and ultimately our own economy.

**Corporate misbehavior will continue to breed mistrust of Wall Street.

**He predicted the U.S. gross domestic product will rise just 0.8 percent next year.

Another point of view, from Joel Stern, managing partner and chief executive of Stern Stewart & Co. in New York, and a business school graduate:

**Dimming consumer confidence, a loss of stock market wealth and accounting scandals took their economic and financial toll this year. But inflation-adjusted incomes and improving worker productivity mean bigger economic growth next year than this year's estimated 2 percent growth.

**Stern predicted growth in the U.S. gross domestic product could top 4 percent next year.

Overshadowing any prediction of just what the U.S. economy will do next year is war. Beyond war with Iraq, which is "highly likely," the potential for that conflict to trigger wars around the world is strong, said Marvin Zonis, a professor emeritus of business administration who runs an international risk consulting firm.

Calling 2003 the "year of war," Israel may be the hardest-hit among nations at war, he predicted.

"I think that it is the case that no administration in the history of the United States.. has been as ideologically driven as the Bush administration," Zonis said.

He predicted hard-line hawks in Bush's Cabinet will seek to push out Secretary of State Colin Powell, who has not been as much of a war enthusiast, and replace him with Condoleezza Rice, Bush's national security adviser.