The 17th Annual California State Fullerton Economic Forecast did not paint a pretty picture of the national of state economy for the next few years.
Economists Anil Puri and Mira Farka took the stage at the Hyatt Regency in Irvine this afternoon to deliver the 17th annual California State Fullerton Economic Forecast. At this point, given the state of the economy, no one expected the outlook to be good. The news that U.S. GDP growth picked up somewhat in the third quarter, to 2.5 percent, took some of the edge off. The theme of last year's presentation was "Recovery," so it made sense that the question asked this time around was "Where's my boom?"
Yeah, about that boom...
Much like the UCLA Anderson forecast, released in September, the Fullerton forecast — which provides a comprehensive picture of the national and Southern California regional economy — tackled the sluggish nature of the recovery from the 2008 Financial Crisis and subsequent Great Recession. What are economists at UCLA and Fullerton worried about? Well, not about finding a boom. More like avoiding a stall:
AP Photo / J. Scott Applewhite
The Federal Reserve Building in Washington, DC.
The Federal Reserve publishes its so-called "Beige Book," a snapshot of the economy taken through the lens of the Fed's district banks, eight times per year. It is booor-ing. You may not even want to read the executive summary of the latest version. Luckily, you don't have to, because I've broken it down into bullet points. And I've assigned my own grades, on how the various parts of the struggling economy are doing. (The Fed, needless to say, doesn't hand out grades.)
•The Big Picture
"...overall economic activity continued to expand in September, although many Districts described the pace of growth as 'modest' or 'slight' and contacts generally noted weaker or less certain outlooks for business conditions."
Translation: Stuckflation, an economy going nowhere, for the rest of the year.
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Americans hold up 'I want to work' placards as they join a protest of several thousand people demanding jobs outside City Hall in Los Angeles on August 13, 2010. A Labor Department report showed 131,000 jobs were lost in July and the unemployment rate remained stuck at 9.5 percent.
Here's what we know: unemployment nationally is stuck at 9.1 percent; job "creation" is stuck at less than 100,000 per month; applications for unemployment benefits are stuck above 400,000 per month; and GDP growth is stuck below 3 percent.
And that's just four "stucks." Add in numerous other datapoints and you get a Big Stuck — the story of the American economy.
It's far worse in California, where we're stuck on everything that the nation is stuck on, but because of our thousands of unemployed construction workers have an jobless rate of 12 percent.
There are exactly two sets of ideas about how we can get out of this quagmire. On the right, the argument is to cut taxes, reduce government spending, and eliminate regulations that encumber business activity. On the left, the argument is to raise taxes on the wealthy while cutting them for the poor and middle-class, spend more on economic stimulus, and more rigorously regulate high-risk financial and business activity.