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Can't Miss It: Thanksgiving Eve
This morning we were down at the Greater Seattle Chamber of Commerce breakfast and regional economic forecast discussion, which opened with chair Tayloe Washburn being emotionally overcome while talking about how strapped food banks are for donations. (At which point we sorely regretted suggesting the chamber was "populated largely by jaw-dangling idiots," and wished we'd stuck to the rule of vilifying awful ideas rather than the people whose heads they're stinking up.)
There was a bracingly grim subtext to the discussion, moderated slightly by it being held in the warmly wealthy embrace of the Washington Athletic Club--maybe this is what it was like hearing about the iceberg "issue" in Titanic's first class cabins. Washburn kicked things off by insisting this was also a time of challenge and opportunity, but his anecdotes about a CEO admitting to a 90 percent slump in weekly new home sales and his own father--who helps at a food bank and called the family to tell them no presents this year, he's giving all he can in food--set a no-whitewash tone.
Michael Parks of Marple's Pacific Northwest Letter spoke next, declaring that Washington's economy peaked in 2008, that 2009 would bring the slowest economic growth in a decade, and that the recession could last into 2010. The "good" news is that over half the country, taken by state, is worse off, thanks to our sturdy three-legged stool of aeronautics, software, and construction. (Also, Washington does well with a weak American dollar, thanks to exports.) The bad news is one of our three legs can't get its new plane out the hangar door, the builder leg overbuilt on condos the past few years, and the Redmond leg is not going to be hiring at its usual clip. Come on, exports!
Jim McIntire, the state's Treasurer-Elect, announced he'd recently discovered that Washington printed its own money during the Great Depression, and he was wondering what we'd done with the press. On the one hand McIntire argued that Washington's economy was relatively protected from the brunt of the recession (the "strong fundamentals" argument), while on the other, he was deeply concerned by the state's tax revenue projections. 80 percent of state revenue comes from business and retail taxes, and when businesses aren't busy and buyers aren't buying, taxes take a huge hit. Thus that pesky projected $5 billion shortfall for the next biennium. Normally the state could rely on belt-tightening and deficit spending, but with the credit crisis, municipal bonds aren't the hotcakes of yore. Come on, federal government guarantees for state bonds!
Glenn Pascall, an economist who op-eds for the Puget Sound Business Journal, where he has exhibited a terrible tunnel-vision himself, had good news for aeronautics--banks like planes as investments, they're almost a fungible good--but he also mentioned that strikes, like the one recently at Boeing, open the door for Gulf Coast states to talk about their reliable, lower-paid workforce itching to put 787s together lickety-split. Also, the West Coast share of Asian trade is falling precipitously, as shippers send long-haul cargo through the Panama Canal. (So our incredibly slow freight trains aren't just annoying Amtrak passengers.) As a cautionary tale, he mentioned California freezing its public works because no one's buying the state's bonds. Come on, big public infrastructure projects like tunnels underneath Seattle!
The Q&A was desultory: what about ARMs resetting--deflation is a bigger problem; will the Gates Foundation save us--no, but they're doing good work; will this crunch help the state get over its phobia about public/private partnerships on public works--maybe, couldn't hurt; what about non-profits--when businesses aren't making money, they don't need philanthropic tax breaks; does the tax revenue shortfall open a door to a state income tax--only if the recession goes on for longer than a term in state office (okay, we're paraphrasing on that last one).
Our very first reaction was to rub our chin thoughtfully. Our second was to skip going out for lunch.
A photo-argument the panelists didn't cover, courtesy BurningOak and the Seattlest Flickr pool.
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"Jaw-dangling idiots"? Way to go ad hominem, dude.
Hey, that's my Prop 8 sign! :) I'm glad someone read it. Married people pay more taxes. Hey, at least it's a start...
I was a little hot under the collar. You know, you couldn't get six bucks for a subway in Seattle the past 50 years, but $6 billion for a tunnel so cars can bypass Seattle, well, price is no object. The heart wants what it wants.