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They continue to be downbeat, even as other economists turn a bit more positive about the nation's growth prospects. Ed Leamer, director of the Anderson Forecast, could have predicted the headlines he'd receive when he wrote in the quarterly report, "It's not a recovery. It's not even normal growth. It's bad." No major economist I've come across has sounded so pessimistic, and even Leamer points out that in spite of the unpleasant bigger picture, he expects growth to reach 3 percent in 2015 - not horrible, all things considered. So what's the problem? From the report:
Growth in GDP has been positive, but not exceptional. Jobs are growing, but not rapidly enough to create good jobs for all. And, we as a nation remain oblivious to the economic difficulties we face and we continue to wait impatiently for a surge of growth that will allow us again to forget our most fundamental problems, which are too much government spending funded with too much borrowing, too little national savings to pay for health care late in life and too many workers without the skills or abilities to earn decent wages in the 21st Century labor markets.
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GDP is growing, but it's not growing rapidly enough to put Americans back to work, nor is it growing rapidly enough to create the kind of surge of revenue that could make the debt issues disappear. Without that surge in revenue, Medicare and Social Security are unaffordable, and police and fire pensions and medical benefits are unafford-able too. But at least the housing market is getting back on its feet. That will make a significant contribution to economic well-being in the next several years, partly because it will bring back some of the jobs we lost in construction but perhaps more importantly with both housing prices and stock prices recovering we are going to feel wealthy enough again to loosen the tight belts that have been holding back spending since 2008.
California, meanwhile, continues to fare pretty well in the recovery, especially if you happen to be in the construction business. Well, sort of. As economist Jerry Nickelsburg explains:
The good news is the depression in construction employment, at least for those who either stayed in the sector or were marginally attached to it while doing something else, is over. Construction is now a growth sector for California, and given our forecast for continued job gain at rates exceeding the U.S., it should remain so. The bad news is that the shortage of skilled labor will lead to contractors investing in labor-saving capital investment. This will invariably increase the skill requirement for the building trades, and the lesser skilled and unskilled will find that as with other sectors in the 21st Century economy, their lack of skills translates into a lack of good job opportunities.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.