Don Rogers: How rebound plays out
Vail, CO Colorado
In case you missed it, the reces-sion’s over. So where’s the recovery? Good question.
Nariman Behravesh, among Amer-ica’s top economic forecasters, laid it out succinctly at the first session of “Shaping the Future” last week at the Westin.
Ready? A lot of forces will drive the recovery, which will start weak and may well include a setback in the near future, or a “W” rather than the quick bounce back of the ” V.” At best, we’re in for a long “U.” Sorry.
Inflation and the dollar will not be problems, but worry about debt.
The Great Recession was caused by a global credit bubble, of which hous-ing was just one part; addiction to debt and exports; and policy mis-takes, the greatest of which was letting Lehman Brothers col-lapse.
Jobs, a lag-ging sign, will hold the recovery down even as most other indi-cators point up. Look for positives in job growth no sooner than March or April. Driving the recovery: lower com-modity (and other prices), including energy. Rebounding stock market. Despite their flaws, the bank rescue package and stimulus initiatives. Per-haps most underestimated, pent-up demand, which Behravesh sees unleashing when employment indi-cators improve. And reductions in built-up inventory of all kinds.
The headwinds blowing against recovery are significant, too: concern about jobs. While people are worried about their jobs, they are less likely to spend, and of course that ripples through the economy. People, at least for now, see the value of saving rather than spending, which is good for households and not so good for rapid economic recovery. The housing market continues to struggle. And bank problems continue, particularly in commercial lending.
The economists expect to see 2 percent to 3 percent growth in the third quarter that just ended. And then we’ll see.
Our local economy is based on lux-ury travel and second homes, gener-ally big and expensive ones. So we likely will be on the tail end of the recovery, like jobs.
Behravesh went for an hour, but the above is the gist. Naturally, he reminded the audience that econo-mists are a breed that may be wrong, but seldom are they in doubt.
In other words, make of it what you will. We are much better with the rearview mirror with such things than seeing around the bend.
On Thursday, local health care executives will speak from 6 to 8 p.m. at Battle Mountain High School. Contact Kelli Kostroski at the Vail Symposium at 970- 476- 0954 or firstname.lastname@example.org for more information.