On February 21, 2013, I was an inspirational speaker for a group of government finance professionals in Arizona. The other inspirational speaker, Alan Maguire, presented a comprehensive economic update both nationally and locally to the group in Arizona.
Here is some of the wisdom gleaned from his inspirational speech about our economy and the 'New Normal':
Since 2009, we have been struggling to come out of a cyclical recession. The good news is that most of bad is behind us; however, this has been the slowest recovery post World War II. We now lack the historical drivers that pull us out of recession.
Housing is usually one of the channels that drives us out of recession and this has been slow to recover. More investors are buying real estate and fewer consumers are coming to the table, making housing an inaccurate and ineffective predictor.
Usually, the deeper the recession, the bigger the recovery. This time around we haven't bounced back hard like before; our recovery isn't bouncing as high as our loss was low. Our recoveries are getting flatter. We can expect a slow but steady growth, 1.5 to 2.5 percent annually.
Some of the deterrents to our economic growth are:
- Consumer confidence hasn't rebounded as it did in the past
- International issues: Europe is in a recession, Japan has high debt and an aging population and Asia has government challenges
Locally, Arizona is much better off than many of the remainder:
- Arizona is now a Top 10 growth state
- In 2009 Arizona dropped to 49th growth state in the country and have rebounded to number 3
In his inspirational speech, Maguire suggested that The New Normal future will not be a repeat of the past. Where are we going?
Europe has 3.5 million fewer jobs now than in 2008 and they will lose 4.5 million more within 4 years
Some of the Troubling Trends Include:
-Slower income growth
-Longer periods of unemployment
-Smaller proportion of employed to unemployed
-Societal sense of entitlement
America's strengths include:
- Strong, agile markets
- Infrastruction that is strong although aging
- The finest higher education system
- The highest caliber rule of law
- Perceived as a worldwide leader
- History: The USA has transformed the world 3 times
- Leads worldwide innovation
- Drives the global economy
Rediscover free enterprise
Reinvigorate American competitiveness
Reinvigorate individual responsibility
Reduce federal spending
The inspirational speaker for the government professionals suggested that the economic recovery in the US will ride on energy, specifically natural gas not solar energy (which has one fundamental problem...darkness)