On behalf of Rutgers, the State University of New Jersey, and on behalf of the Edward J. Bloustein School of Planning and Public Policy, it is indeed my pleasure to welcome the Leadership New Jersey Graduating Class of 2009. Rutgers University is very proud to host this event, and is very proud to have collaborated with Leadership New Jersey since its inception in 1986, almost a quarter of a century ago. Rutgers and the Bloustein School focus intently on the many public policy issues confronting New Jersey and the United States. Thus, the mission of Leadership New Jersey - the education of a generation of future leaders in New Jersey that will be able to make a positive difference in the future of the state - is vitally important to us.

I think it is well recognized that I'm the only totally objective person in all of New Jersey. And it is my objective opinion that, although you are not receiving a traditional academic degree today, you are receiving an exceptional credential, a superb pedigree that is of vital importance in a knowledge-based economy - that is of vital importance in a troubled knowledge-based economy. This pedigree will serve you extraordinarily well in all of your professional and public service endeavors. Equally important, the relations and networks that you have built up during your Leadership New Jersey experience will have lifelong benefits to you. And certainly the State of New Jersey will be the beneficiary of the increased pool of potential leaders that you represent.

Today, you will become a formal member of an elite organization that has over 1,000 Fellows that are or should be engaged in the critical issues we face today. Now, if this were an undergraduate ceremony, the advice I'd really like to give you about now going out into the world is: "don't do it - I've been out there and it's a mess." But, I won't give you that advice, exactly because it really is a mess out there. Obviously, a savvy group such as the Leadership New Jersey Class of 2009 already realizes this, and we need all of your newly acquired skills to help untangle it.

Many of the Fellows before you came through the program during years that simply morphed into one another without a heck of a lot of economic fanfare whatsoever. In fact, for many classes, there was a fortunate absence of serious economic or societal travails. For example, in the late 1990s, year after year New Jersey seemingly had a Mae West economy - "Too much of a Good Thing -- is Wonderful." But, unfortunately, wonderful rarely lasts forever and it ultimately didn't. The world changed dramatically as the first decade of the new century and new millennium unfolded.

Fast forward to 2009 - unfortunately, wonderful has been banished from our economic vocabulary. We have been facing problems of biblical proportions seemingly without end. Consequently, you are certainly not getting off as easy some earlier Leadership New Jersey classes. In is no exaggeration to assert that we are in a time of unprecedented economic crisis in the state - to say nothing of the nation as a whole - and all of its related fiscal and societal consequences. The depth and breadth of the challenges that face us require us not only to reassess New Jersey, but to remake it - to reinvent it. And your future leadership - and the efforts of Leadership New Jersey - will be vital to this key policy issue that will dominate the coming decade.

So, you are obviously graduating at a unique moment in time. In just 29 days, the first decade of the first century of the new millennium will officially be in the history books. And it is a decade that absolutely no living economic forecaster predicted correctly. I think that proves the old adage that if you took all the economists in New Jersey and laid them end to end, they'd still point in different directions. In this context, I should point out to you that there are three kinds of economists in New Jersey: those that can count, and those that can't - and all three types never envisioned that the 2000s would turn out to be the lost economic decade.

Remember how optimistic we were ten years ago about the dawn of the new millennium and the wonderful advances it would bring. Final "End of Decade Autopsy" - the first ten years of the new millennium is the first time since the Great Depression and the 1930s that we will exit a decade with fewer jobs than when we entered it. So, our current condition is unprecedented in our lifetime.

But, Leadership New Jersey did not spend this past year just to prepare you for wonderful and rosy economic times. The goal was to prepare you for confront public policy challenges, and boy do we have challenges for you. One of these is to fully reboot the once great New Jersey job creation machine. This will be the first stage in reinventing the state, a key task that will dominate the second decade of the new millennium.

In this context, the post-recession national and global economic winners of the 21st century have yet to be determined. New Jersey, with a new governor and with new legislative leadership, has the potential to renew its position as a competitive global economic player. The Great 2007-2009 Recession has actually leveled the economic playing field for us. Formerly high flying states such as Arizona, California, Florida, Georgia, and North Carolina - all fierce economic competitors that had been outperforming New Jersey - have been deeply damaged by the recession. So the once promised economic lands no longer look so promising. For most of this decade, New Jersey has been virtually relegated to rear of the national economic train. But, it now has the opportunity to achieve a major economic reset as a new decade unfolds. We can emerge as a potent revitalized competitor.

This will not be an easy task. While America has avoided economic Armageddon, and the tide may have slowly started to turn, it has still not fully ebbed. We remain in a deep employment hole, and there is a tremendous amount of ground to be made up. There are two hypotheses regarding national job growth and the recovery in 2010, your first full year as fellows. The first, and best case scenario, is that the sheer severity of the employment losses recorded to date represented a panic-induced overshoot. Anorexic Corporations belt tightened till they didn't have a waist size anymore. According to Hypothesis I, because they eliminated too many workers too fast, they will be caught short when the recovery gathers momentum, and hiring will be very brisk. This suggests a strong employment bounce back. In terms of economic calligraphy, this would be a V-shaped recovery - a "V shaped" recovery. A sharp plunge downward followed by an equally sharp rebound upward. This has generally been the pattern with most severe recessions, and this has been the most severe postwar recession.

Hypothesis 2 - more ominous - suggests that despite extraordinary absolute employment cuts, lean hiring will ensue because of the current scale of underemployment. Many companies, rather than laying off even more workers, have reduced their hours and placed them on part time status. As evidence, the average workweek is now at a record low - approximately 33 hours. This indicates a large amount of room to expand hours of the existing workforce. Thus, underutilized workers will first be more than fully utilized before new hiring takes place - that is: part-time to full-time to over-time. In terms of economic calligraphy again, this would lead to an "L-shaped" labor, i.e., labor markets bouncing along the employment bottom for an extended period of time. This historically has been the pattern following severe financial crises, and we have just experienced the most formidable man-made financial calamity in modern experience.

So, there are two conflicting historical precedents to set your expectations for 2010 - nobody promised you that economic analysis would be easy. Longer term, there is an increasing consensus that it will take us until the second half of the next decade to get back to pre-recession job market conditions. Consequently, every state and every governor will be desperate to secure jobs for their citizenry. New Jersey will face a period of intense furious interstate competition for future jobs. But, we still have a market location advantage, a strong consumer base, a high-quality labor force, and a balanced profile of advanced business services, as well as significant high technology assets.

These strengths give us high potential going forward. However, the state must regain a more competitive business cost position. This will require enormous political will to restore fiscal discipline, eliminate structural budgetary deficits, revive business competitiveness in all its complex dimensions, and rebalance the use of its resources away from current immediate consumption - and to shift them to strategic investments in the economic infrastructure of the 21st century.

This is certainly an imposing set of tasks. And they will require unprecedented statewide leadership. I'm confident that Leadership New Jersey will be a major contributor to the enormous efforts that will have to be expended here. I'm also confident that your year as Fellows has prepared you for this new role. You should relish the forthcoming opportunity to reshape, reboot, and reset New Jersey, and to make a real difference in the future success of our state, its municipalities and its economic and social institutions. I look forward to seeing all of the positive results of your efforts in the years to come. So congratulations Class of 2009.

© 2012 Leadership New Jersey