Economic Stuffing

by Bernard McCormick Wednesday, October 10, 2012 2 Comment(s)

Over the last four or five years of economic distress, it has been remarkable how accurate the economic forecasters have been. Whether it is experts commenting on national conditions, or local specialists predicting the course of Florida real estate and employment expectations, those most often quoted in the media have been spot on.

And almost all have said the same thing. The recession officially ended in 2009, but they warned that the recovery would be slow, that it would take years for real estate values to recover, and we had to be prepared to live with high unemployment longer than in past recessions. Can anybody say they were wrong? If anything, real estate is coming alive a bit faster that most experts predicted. Almost every week there are reports of home sales and prices rising in South Florida, and some of the numbers suggest we need to be careful of another bubble as flippers buy foreclosed properties, do some improvements and turn quick profits. That would have seemed a reckless thing to forecast even a year ago.

At Gulfstream Media Group, our six magazines have seen improvement about on schedule with the prognosticators. While 2008 was a very bad year, by late 2009, just as the stock market recovered, business began to improve. It wasn’t fast, but it was noticeable – 2010 showed gains, and 2011 did as well. It wasn’t much, only about 5 percent last year, but with the exception of real estate, it was a broad-based improvement, suggesting that confidence in the advertising community was gaining strength.

This year has seen more of the same. Sales have been up and down from month to month, but last month was especially strong – one of the highest year-to-year jumps since the recession set in. We are only a week into it, but October looks strong as well, suggesting a fourth quarter that should bring year-end totals a few points above last year. Compared to the late '90s and first years of this century, when 20-25 percent growth was normal, it isn’t anything to make champagne corks self-eject, but then it is totally consistent with what the pros told us to expect several years ago.

It is more amusing than disturbing that some political types can’t be candid about the economy improving. Nationally, the Republicans are predicting the end of the world, but local governors in important states, including our own, are contradicting the party line by boasting of their states’ economic recovery. Frankly, they don’t deserve any more credit now than they did blame for the hard years. President Obama hasn’t asked for our advice, but if he wants to break out of his debating funk, he might say something like this:

“In terms of the economy, it doesn’t matter who wins this election. Things will be better. If we win, we will take credit; if Gov. Romney wins, he will take credit. But things are better now, and will be better next year.”

That would be the truth, something hard to find this fall of political discontent.

Comments

Who's Rose Colored Glasses? Mc Cormick vs. IMF...

This Comment had been Posted by mmccormick

Who's Rose Colored Glasses? Mc Cormick vs. IMF. Looks like a difference of opinion, and remember we are talking about opinion. Anyone can have one and the value comes down to ink on paper. Bottom line: Obama--Obummer. Only my opinion.


I am in construction and I agree 100% with your op...

This Comment had been Posted by mmccormick

I am in construction and I agree 100% with your opinion. The wild growth we experienced in mid-2000 was simply not sustainable. Developers were using easy financing to speculate in warehouse and office complex real estate with no thought to tenanting these projects. Many are still empty. But I was making a boatload of money as a structural steel draftsman and I saw the value of my home inexplicably triple in 3 short years. The collapse in 2008 resulted in property devaluation, there was little work to be had and I was facing serious competition due to outsourcing to India. (Really do you want some guy half way round the world drawing the supporting skeleton of your multi-storey office building?) Sorry, I digress. There has been a slow but steady recovery in the last 3 1/2 years. It is sensible recovery, at sustainable rates, in my humble opinion. When I bought my home in 2000, I did not expect it to triple in value for many, many years and I feel the economy has reset itself to that level. My income is relatively stagnant and I would like to see some more growth in that sector. Honestly I believe that will be best achieved by not bowing to corporate bullying (i.e.Koch brothers thinly-veiled threats to their employees). However, I agree that economic growth will continue regardless of the election outcome. The anxiety created by the intensity of the campaigning will be gone, the people will put on their big boy pants and get back to work, and I for one will be glad when the election is over.


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