Believe it or not, there's optimism out there!
Somewhat last minute, I received an invitation to attend the 47th Annual Economic Forecast Luncheon today in downtown Phoenix. I had attended this event a couple of times ten or fifteen years ago, so I somewhat knew what to expect: a huge room at the convention center filled with about 1,000 local civic and business leaders listening to a panel of national and local economists. It's actually quite entertaining because some of the economists have done the panel for many consecutive years and like to throw both spontaneous and planned jabs at each other.
Anyway, I'm happy to report that there is finally economic optimism in the world--and perhaps more importantly, in Arizona. It was commented (several times) that Arizona is one of the "big four" (California, Florida, Nevada and Arizona) who's economies are strongly tied to in-migration and construction growth and that the big four tend to have wider economic swings than the rest of the country.
A national economist, Joel Naroff, PhD, was the first speaker and he struck some of the most optimistic tones of the luncheon. He cited: 10 consecutive months of job growth in the private sector (probably 11 when November numbers are announced this Friday), four consecutive quarters of double-digit growth in software and vehicle sales, among other statistics. He said the national economy should be extremely strong and generating "large job growth" by spring 2011. The problem, according to Naroff, is fairly simple: the American people expected a "hare" recovery and what we got instead is a "tortoise" recovery. But in the end, slow and steady wins the race, he said, as long as we can collectively get over our need for immediate gratification.
Professor Lee McPheters of Arizona State University talked about the troubles of Arizona and metro Phoenix, but he too, sees sunshine on the horizon. He's predicting slow growth (again, the tortoise) but no double dip, as has been rumored/feared in the local press recently. Here's a somewhat crazy statistic: McPheters cited a Gallup poll from November 2010 indicating 59% of Americans think the economy is getting worse. Then he put up the same poll from a year ago (November 2009) showing that 57% thought the economy was getting worse. What we really have is a pessimism problem, he reasoned, probably based on stubbornly high unemployment and a housing market that just doesn't seem to want to move upward. In conclusion, he joked: "What we really need is a new bubble to move us back forward again!" and he urged us to contact our state representatives to indicate our support for the Bubble Act of 2011.
Now, if we can only get some of this optimism into the WorldatWork Salary Budget Survey data ...
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|Wed December 1, 2010 10:44 PM||Report Abuse|
Member Since: 4/19/1979
It's the practical product of ignoring expectation theory. So many hopeful pollyannish pundits have been frantically seizing on the slightest sign of a decline in the negative number trends that folks are continually frustrated by a mundane reality that fails to meet their exaggerated expectations they were led to expect immediately. A professor who spent a year in Moscow every five years for twenty years long ago in the Reagan years told me that the populace of the USSR was sullen, angry and resentful; prime for revolt, although we didn't realize it was so close at hand. I protested that things had changed a lot for the better there from 1945 to 1983 and she agreed, from the outsider's perspective. But the common people had been promised over and over each year that each next five-year plan would make everything right,and sacrifices were necessary to let them recover from The Great Patriotic War. Well, after almost forty years of being told everything will be great next year, no native could accept the small incremental improvements as meaningful, compared to how well the rest of the world had recovered without equivalent sacrifices. False optimism will destroy hope faster than gritty resignation. Everyone with an ounce of sense knew this was going to be a U shaped recovery with a long slowly rising base line before full consumer/industrial/institutional confidence is totally restored.