It is customary when preparing one of these economic-outlook think pieces to pick up a metaphorical pair of binoculars and scan the metaphorical far horizon for portents of what’s to come.
If we’re at the height of boom times, we’re looking for bursting bubbles (presuming that’s something you can see in the distance – work with us here), looming thunderclouds, whatever your preferred sign of looming economic slowing and distress.
If we’re in the depths of a recession, we’re looking for signs of rescue – the cavalry riding over the hills to relieve the fort, if you’re partial to old westerns, or a bird returning to the boat with a twig in its beak, if you’re partial to biblical allusions.
And if we’re somewhere in between – which is where we appear to be now heading into 2015?
In that case, maybe what we need is a different metaphorical optical device – a mirror, not binoculars.
When we’re looking out into the distance, what we expect, hope or dread to see is what someone else somewhere else might do to our economy. What’s China up to? What’s Putin up to? What’s Europe doing? Which Middle-East trouble spot on the lengthy list of candidates is blowing up this week? What formerly healthy and largely ignored regional economy is suddenly making news and garnering attention for all the wrong reasons?
Or maybe it’s not a place but a thing – a new technology that massively disrupts an entire industry or a country.
Those sorts of influences still matter, and bear paying attention to. For the moment, though, they’re not the most important factors shaping the direction of the economy.
Those can be found by spending some quality time with that mirror.
Once in front of that mirror, we need to ask the person (people) on the other side some questions. “What sort of economy do you want? What are you going to do to achieve it? What are you doing, intentionally or not, to prevent that from happening?”
Not every economic calamity or revival that the American economy experiences is homegrown, but that’s been the record of late. The dot-com boom and its subsequent bust? Can’t credit that to or blame it on outsiders – that was fully our doing. The housing boom and the subsequent bust, resulting in a recession of epic proportions? Yup, us again.
The energy revolution in which the U.S. finds itself awash in inexpensive and plentiful oil and gas? American resources on American land developed with American technology.
Even resolving the housing-driven recession was largely a domestic affair, done at considerable cost and pain endured by American consumers, homeowners, employees, business operators and investors. Fine, we’ll grant the point that American exports like Boeing airplanes and Washington wheat helped, but the biggest contributors to recovery weren’t sourced in China or Europe.
Because of all that, the state of Washington, the Pacific Northwest and the U.S. find themselves in relatively, and perhaps surprisingly, decent shape compared with the rest of the world. Outside of some isolated markets and sectors that are back to their previous bubble-like behaviors – Seattle real estate prices, for example – it’s a “could be better, has been worse” economy. Not exactly robust, but not exactly sluggish either.
“I love to see good steady growth without that hockey-stick growth that we saw in the early 2000s,” said Heritage Financial Corp. Chief Executive Brian Vance in a recent interview. “I welcome a nice steady growth in our markets.”
“In the past we’ve come out of recessions with big spikes in economic growth,” added Jim Mitchell, president and chief executive of Bellevue-based Puget Sound Bank. This time, Mitchell said, the recovery “won’t be dramatic but it will be stable.” That, he added, offers the prospect of a sustained recovery “rather than a short spikey one.”
Sounds about right. So how do we keep it that way?
That depends on what we do. Do we limit the potential of the energy revolution? Do we look for new ways to drain money from the economy (the governor’s carbon-emissions tax, one of dozens of new tax proposals on the 2015 agenda at the federal, state and local level, envisions grabbing $1 billion a year at the start just by itself)? Do we let the quibbling and complaining from overseas limit what our tech sector can do? Do we as individuals, consumers, investors and business owners keep pushing for the alternatives, workarounds, innovations and new ideas that keep the economy, whether it’s here in Tacoma or for the country as a whole, growing?
It’s important to ask ourselves those questions, but even more important to come up with the answers ourselves. The answers won’t come from that imaginary piece of reflective glass. Even metaphorical mirrors have limited powers.
Happy New Year – and good luck.