The Inland Northwest’s 2011 economic prospects have all the appeal of leftover green bean casserole.
That’s pretty much the dish from local economists who see the near future in the near past. We seem to be digging out of the recession with a salad fork.
Take the two recent presentations by John Mitchell and Grant Forsyth at the Greater Spokane Incorporated economic outlook forum. It was, by the way, a breakfast event.
A former economist for US Bank, Mitchell naturally takes his cues from the Federal Reserve Bank. The Fed may or may not be setting the United States up for a new era of inflation, but until Congress and the president establish some fiscal discipline, the bank’s aggressive monetary policy is at least coherent, even if many do not like what they co-hear.
Mitchell suggests a few markers for 2011: indications the Fed’s actions are working, that the National Commission on Fiscal Responsibility and Reform’s recommendations are not dismissed out-of-hand, and that private-sector hiring continues to strengthen.
On that last, Wednesday’s report new unemployment claims fell to the lowest level in two years was cheering.
Forsyth, an Eastern Washington University professor, says Americans have set aside the “big cake economy” for — broccoli. He may have his vegetables wrong, but the meat of Forsyth’s annual presentations has usually been well-done.
He predicted 2010 would be a year of continued erosion in home values, flat tax revenues and stabilization of the job market. For 2011, he foresees improving employment prospects, less pressure on real estate, and little or no help for state and local governments cutting employees and services.
Forsyth says hard times in rural communities will continue, despite what he and Mitchell agree are better days for agriculture. Many counties around Spokane depend on government payments and jobs that are not good foundations for future growth.
People are migrating to Spokane, or out of the region, in search of a better future, he says.
Avista Corp. economist Randy Barcus has been a long-time observer of migration trends, and he told an Urban Land Institute forum he does not like what he has been seeing.
In-migration, mainly from California, has been the big driver of North Idaho’s growth for two decades, he says. Those newcomers brought their home equity, their capital and their businesses. Now those Californians are chained to their homes and, if they have one, their jobs.
Barcus does not expect much northbound traffic on Interstate 5 for several years.
He worries, too, about the pending termination of the federal government’s emergency unemployment program, and the out-migration that might be triggered when checks stop coming. A prolonged stalemate over the expiring federal income tax reductions could significantly curtail economic growth, he adds.
Mitchell, Forsyth and Barcus together bemoan the policy uncertainties that make a hash of business plans and planning.
Only Mitchell mentioned it, but the response to the pending budget commission recommendations will be telling, too.
If nothing else, the menu of options from co-chairmen Erksine Bowles and Alan Simpson puts the lie to those who contend eliminating earmarks and waste will solve our fiscal problems.
We’ll soon see if we have the stomach for the kind of austere economic fare on plates in Ireland and Britain, where they seem resigned to belt-tightening.
Makes green-bean casserole look like comfort food.
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