CA Urban/Community Forest Conference: The Economy 2012 P alo Alto, CA September 16, 2011 Robert Eyler, Ph.D. Professor, Ec...
Major Economic Issues <ul><li>A year of mixed signals and international issues </li></ul><ul><ul><li>International concern...
What we have tried <ul><li>Monetary Policy: about $1.2 trillion </li></ul><ul><ul><li>Generate investment from lower inter...
Source: Federal Reserve Board
Source: Federal Reserve Board
Source: Federal Reserve Board
S&P 500 Index, 1990 - Present Sources: Reuters and CREA at SSU
S&P 500 Index, 2007 - Present Sources: Reuters and CREA at SSU
Philadelphia FED Business Survey, 1968 – Aug 2011 Source: Federal Reserve, Philadelphia
What we want (or should want) <ul><li>Investment in solutions to scientific problems </li></ul><ul><ul><li>We know these p...
Source: BEA (www.bea.gov)
Source: BEA (www.bea.gov)
Source: BEA (www.bea.gov)
Unemployment Rates, US and CA, Seasonally Adjusted, 1976-2011 Source: BLS (www.bls.gov)
California <ul><li>2011-12 likely to be slightly better than 2010-11 </li></ul><ul><ul><li>If recovery is truly in place, ...
TechPulse Index, Jan 2007 = 100 Source: BEA (www.bea.gov)
Source: BEA (www.bea.gov)
Source: BEA (www.bea.gov)
Investment in Environmental Change <ul><li>Three biggies: </li></ul><ul><ul><li>Peak oil, petroleum use and culture </li><...
Housing and Environmental Issues <ul><li>People make consumption choices, households make savings choices </li></ul><ul><l...
Environ Employment, 1990-2011, Index (1990 = 100) Source: BLS (www.bls.gov)
Peak Wood? Index (1979 = 100), 1979-2011 Sources: BEA (Residential) and BLS (Softwood Prices)
Where are we headed? <ul><li>Recession-like activity through 2011: labor markets </li></ul><ul><ul><li>Hiring not concentr...
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The Economy 2012

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  • The Economy 2012

    1. 1. CA Urban/Community Forest Conference: The Economy 2012 P alo Alto, CA September 16, 2011 Robert Eyler, Ph.D. Professor, Economics Frank Howard Allen Economics Research Fellow Director, Executive MBA Program Sonoma State University [email_address]
    2. 2. Major Economic Issues <ul><li>A year of mixed signals and international issues </li></ul><ul><ul><li>International concerns worldwide </li></ul></ul><ul><li>Domestic economy in US continues to struggle </li></ul><ul><ul><li>International issues transmission to US </li></ul></ul><ul><ul><li>US issues transmission to world building: is the debt a big deal? </li></ul></ul><ul><li>State: Budget passed, mix of cuts and new taxes </li></ul><ul><ul><li>Where will the new unemployed public workers find jobs? </li></ul></ul><ul><ul><li>Is there a commitment to anything in Sacramento? </li></ul></ul><ul><li>Commercialized science the key long-term: pulls all behind </li></ul><ul><ul><li>Where is the investment? </li></ul></ul>
    3. 3. What we have tried <ul><li>Monetary Policy: about $1.2 trillion </li></ul><ul><ul><li>Generate investment from lower interest rates and increasing money supply </li></ul></ul><ul><ul><li>Good: stimulated exports </li></ul></ul><ul><ul><li>Bad: inflation potential and lack of focus </li></ul></ul><ul><li>Fiscal Policy: over $800 billion </li></ul><ul><ul><li>Advertised as “New Deal 2”, some of that happened </li></ul></ul><ul><ul><li>Lack of investment in science, no focus here either </li></ul></ul><ul><ul><li>New jobs packages more rhetoric than real for now </li></ul></ul><ul><li>If innovation and entrepreneurship the way out of recession, not much direct investment </li></ul>
    4. 4. Source: Federal Reserve Board
    5. 5. Source: Federal Reserve Board
    6. 6. Source: Federal Reserve Board
    7. 7. S&P 500 Index, 1990 - Present Sources: Reuters and CREA at SSU
    8. 8. S&P 500 Index, 2007 - Present Sources: Reuters and CREA at SSU
    9. 9. Philadelphia FED Business Survey, 1968 – Aug 2011 Source: Federal Reserve, Philadelphia
    10. 10. What we want (or should want) <ul><li>Investment in solutions to scientific problems </li></ul><ul><ul><li>We know these problem are coming or are here </li></ul></ul><ul><li>To remain the technological and scientific leader worldwide </li></ul><ul><ul><li>We know competition is coming from all points on the globe </li></ul></ul><ul><ul><li>Who in here likes math? </li></ul></ul><ul><li>To create jobs and businesses </li></ul><ul><ul><li>Science has a large multiplier effect on our economy </li></ul></ul>
    11. 11. Source: BEA (www.bea.gov)
    12. 12. Source: BEA (www.bea.gov)
    13. 13. Source: BEA (www.bea.gov)
    14. 14. Unemployment Rates, US and CA, Seasonally Adjusted, 1976-2011 Source: BLS (www.bls.gov)
    15. 15. California <ul><li>2011-12 likely to be slightly better than 2010-11 </li></ul><ul><ul><li>If recovery is truly in place, CA will feel effects of recovery </li></ul></ul><ul><li>Labor market still the big deal </li></ul><ul><ul><li>Private and public issues: job creation vs. destruction </li></ul></ul><ul><ul><li>Need to stimulate jobs and business and retain both </li></ul></ul><ul><li>CA slowly bifurcating in terms of housing markets </li></ul><ul><ul><li>Interior valleys likely to have a Japanese-like recovery </li></ul></ul><ul><ul><li>Coastal recovery dependent on general economic recovery and conversion of emerging wealth to housing demand </li></ul></ul>
    16. 16. TechPulse Index, Jan 2007 = 100 Source: BEA (www.bea.gov)
    17. 17. Source: BEA (www.bea.gov)
    18. 18. Source: BEA (www.bea.gov)
    19. 19. Investment in Environmental Change <ul><li>Three biggies: </li></ul><ul><ul><li>Peak oil, petroleum use and culture </li></ul></ul><ul><ul><li>Generalizing the use of renewables: wind, solar </li></ul></ul><ul><ul><li>Rising oceans and climate change effects </li></ul></ul><ul><li>Three issues </li></ul><ul><ul><li>Lack of ROI short-term: need to commoditize solutions </li></ul></ul><ul><ul><li>Political will around this, especially in CA </li></ul></ul><ul><ul><li>Bad advertising to Wall Street: housing markets a good example of how Wall Street works </li></ul></ul>
    20. 20. Housing and Environmental Issues <ul><li>People make consumption choices, households make savings choices </li></ul><ul><li>Forestry use: are we still using new wood to build? </li></ul><ul><li>Need households to generate demand for many environmental solutions </li></ul><ul><ul><li>Do teenagers consume micro-wind turbines? </li></ul></ul><ul><ul><li>Do teenagers consume solar paneling, low-flow toilets, instant hot water heaters? </li></ul></ul><ul><ul><li>Do people see oceans rising? </li></ul></ul><ul><ul><li>Are teenagers buying high MPG cars en masse? </li></ul></ul>
    21. 21. Environ Employment, 1990-2011, Index (1990 = 100) Source: BLS (www.bls.gov)
    22. 22. Peak Wood? Index (1979 = 100), 1979-2011 Sources: BEA (Residential) and BLS (Softwood Prices)
    23. 23. Where are we headed? <ul><li>Recession-like activity through 2011: labor markets </li></ul><ul><ul><li>Hiring not concentrated in private firms or with sustainable funding </li></ul></ul><ul><ul><li>Unlikely to see a national surge in 2012, as elections and continued uncertainty will drag </li></ul></ul><ul><li>CA economy now starting to pull and push </li></ul><ul><ul><li>Tech firms and activity doing well </li></ul></ul><ul><ul><li>2012 as an election year may also slow things down </li></ul></ul><ul><li>Recognize slower growth and better choices </li></ul><ul><ul><li>Economic development choices have economic and environmental effects on communities </li></ul></ul><ul><ul><li>Investment in solutions to scientific problems a good long-term, slow growth bet </li></ul></ul>

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