EconoMeter | 2013
December 27, 2013 – EconoMeterists’ biggest 2013 surprise
SDUT’s Question: What surprised you most about the economy in 2013?
Gary London’s Answer: Congressional irresponsibility. The general pace of the recovery has not surprised me, nor the stubborn unemployment numbers, as we are in the throes of restructuring the employment base. I think… Read the Article Here
December 20, 2013 – U-T EconoMeter faces off with Pope Francis on income equality
SDUT’s Question: Do you agree with Pope Francis’ assertion that income inequality is the greatest economic problem facing the world?
Gary London’s Answer: No. I think the pope is really speaking about materialism, and what better time to express that sentiment than during this holiday season, when all 3,000 TV channels are overwhelmed with product promotion. Unfortunately,… Read the Article Here
December 13, 2013 – Is all well in Washington?
SDUT’s Question: Are recent federal government actions dealing with banks, industry and the budget sufficient to stabilize the U.S. economy?
Gary London’s Answer: Yes. But I say this while holding my nose. The economy has been recovering, but not through government initiative. The GM bailout should have been a much better deal. The “Volcker” rule is… Read the Article Here
December 6, 2013 – Bitcoin: A viable currency?
SDUT’s Question: Is Bitcoin, an alternative form of money, here to stay?
Gary London’s Answer: Yes. I suppose so, but it is off to a shaky start, what with the Winkelvoss twins as promoters, and a bunch of the money lost by an investor, presumably buried with its cryptographically secured harddrive in a New Jersey dump. This is an online currency whose… Read the Article Here
December 1, 2013 – Are stocks bubbling over? Time to bail?
SDUT’s Question: With stock indexes hitting all-time highs, are we facing a correction in the next few weeks?
Gary London’s Answer: No. While these are numerically new heights, they are not relatively new. A truly healthy economy would have seen an even higher stock market at this point. The market is actually reflecting… Read the Article Here
November 21, 2013 – U-T EconoMeterists: Thankful?
SDUT’s Question: Do we have something to be thankful for, economically speaking in San Diego County, this Thanksgiving 2013? (Or are the turkey trimmings pretty skimpy in this lackluster recovery?)
Gary London’s Answer: Yes. A lackluster recovery is far better than a Great Recession. The economy would really be perking if the construction sector were fully engaged. At the last peak, regional construction employment was 90,000. Now it is down to less than 60,000. We also need the construction jobs because… Read the Article Here
November 7, 2013 – Econometer takes on linkage fee boost
SDUT’s Question: Will the city’s increase in its “linkage fee” on commercial developers to help pay for affordable housing yield a positive economic impact in the region?
Gary London’s Answer: No. The fee is being introduced in an already dicey commercial market with limited new construction opportunities. Most new commercial projects are not currently feasible, so why… Read the Article Here
October 25, 2013 – Obamacare=competence?
SDUT’s Question: Does the rocky rollout of Obamacare signal some concern about federal competence to manage the economy?
Gary London’s Answer: No. It signals some concern about federal competence in managing web sites, and certainly in government contracting. “Managing” the economy to me is about… Read the Article Here
October 18, 2013 – Econometer tackles Chargers stadium
SDUT’s Question: With the convention center expansion approved, should the Chargers Stadium be the next big thing to build, economically speaking?
Gary London’s Answer: No. A south campus for UC San Diego should be a priority because it would present an enormous employment and development catalyst to that region, as UCSD did to La Jolla/Torrey Pines. The Chargers Stadium matters, but mostly for… Read the Article Here
October 4, 2013 – Is closing gov’t an economic downer?
SDUT’s Question: Does a federal government shutdown, even a short one, pose lasting economic harm to San Diego’s recovery?
Gary London’s Answer: Yes. Although it depends on what you mean by “lasting.” The closure of the Miramar Air Show exemplifies the economic domino effect of a government shutdown, as orders for goods and service to vendors are cancelled, demonstrating how the shutdown ripples through the region as it spreads across federal agencies and over time. Importantly… Read the Article Here
September 27, 2013 – Slowing jobs a bad sign?
SDUT’s Question: San Diego County’s annual pace of job growth has steadily slowed from 2.6 percent in March to 1.2 percent in August, which isn’t keeping up with the state or the nation. Do you expect this slowdown to continue for the rest of the year?
Gary London’s Answer: Yes. I would caution that it would be a mistake to use one month as an annual indicator. The San Diego job growth numbers for the first 7 months of 2012 were 2.9 percent as compared to 1.6 percent for the same seven-month period this year. Obviously, there is a slowdown, no doubt the continuation… Read the Article Here
September 20, 2013 – What’s left to fix financial meltdown?
SDUT’s Question: Is there still work to be done to clean up after the 2008 financial meltdown? What are the top reforms you advocate?
Gary London’s Answer: Yes. Our capital markets are more vulnerable to a financial crisis now. The “too big to fail” banks are bigger. Their lobbies have diluted Dodd-Frank reform — they still trade derivatives and other sketchy assets without supervision. They whine about… Read the Article Here
September 13, 2013 – Econometer talks changes in Dow Jones
SDUT’s Question: Do the stock changes in the Dow Jones Industrial Average – Bank of America, Hewlett-Packard and Alcoa replaced by Visa, Nike and Goldman Sachs – signify something bigger for the economy’s direction?
Gary London’s Answer: No. Because Institutions do not benchmark to the index. If anything the DJIA is a lagging indicator that is temperamental, seldom signaling the direction of the economy. Witness recently when the DJIA tanked after the Feds announced… Read the Article Here
September 10, 2013 – $15/hour for fast food jobs?
SDUT’s Question: Should the minimum wage be nearly doubled to $15 for fast-food workers?
Gary London’s Answer: Yes. Higher minimum wages might drive some persons off of public assistance. I’m OK if, as a result, the cost of fast food goes up. Maybe that would lower the obesity rate, which certainly would foster lower health maintenance costs… Read the Article Here
August 30, 2013 – Part-time work: Here to stay?
SDUT’s Question: Do you think the high levels of part-time employment will decline anytime soon?
Gary London’s Answer: Yes. They will decline, but gradually. The answer has to do with changing economic patterns and demographics. Retired persons go back to work part-time to supplement their income; students work part-time; soccer moms only want part-time work… Read the Article Here
August 23, 2013 – Unemployment uptick a worry?
SDUT’s Question: Are you concerned about the slowdown in San Diego County’s job growth and the rise in the unemployment rate?
Gary London’s Answer: No. A long, slow, bumpy recovery was anticipated on the heels of the great recession. On a national level, while 77 percent of jobs lost in the recession have now been recovered, there are still 2 million to add… Read the Article Here
August 16, 2013 – Is 700 MPH public transportation realistic?
SDUT’s Question: Should the U.S. embrace the “Hyperloop” idea as an economic strategy for speeding travel and commerce?
Gary London’s Answer: Yes. Fixed rail is good now for some applications, but at the stupendous cost of new infrastructure, especially in California’s plans, it makes sense to do a technological hyperleap… Read the Article Here
August 2, 2013 – Economic consequences from Filnergate
SDUT’s Question: Excluding any city budget impact, is there an economic price to pay for the continuing Filner sexual harassment scandal?
Gary London’s Answer: No. Certainly, as mayor he has had a negative impact on the hotel/tourism front when he refused to sign the agreement with the Tourism Marketing District and took down their $30 million budget to $5 million. The tourism impact on this alone is quite substantial. But that was based on his executive decision as mayor… Read the Article Here
July 19, 2013 – Busting big banks
SDUT’s Question: Should Congress reinstate bans on federally insured banks operating as investment banks?
Gary London’s Answer: Yes. It depends: Federally insured deposits should be regulated and protected by the government, which insures the deposits. However, investment is critical to banks in order to make money. If traditional banks are allowed to act like Goldman Sachs or Morgan Stanley, their trading activities should be bifurcated from their insured deposit activities… Read the Article Here
July 12, 2013 – Does Comic-Con pay off for the city?
SDUT’s Question: ComicCon will no doubt deposit millions into local cash registers. Are such big but rare conventions worth the public investment to attract them and keep them coming?
Gary London’s Answer: Yes. Conventioneers fill hotel rooms, eat at restaurants and visit local attractions. All are taxable events. The hotel tax, in particular (called Transient Occupancy Tax or TOT), is the best tax of all because it taxes visitors who come, spend and leave. The cost is a third leg to our convention center… Read the Article Here
July 5, 2013 – Enterprise zones: What next?
SDUT’s Question: Will the state’s end to enterprise zones and the advent of a new tax incentive system produce higher job growth?
Gary London’s Answer: Yes. It expands incentives that create jobs to the entire geography of the state, rather than forcing business and investment into designated zones. This makes all the sense, particularly in light of the fact that there are no more redevelopment areas… Read the Article Here
June 28, 2013 – China’s credit crunch effect
SDUT’s Question: Will China’s recent tightening of lending rules affect the pace of economic recovery in the U.S. and San Diego?
Gary London’s Answer: No. Since the U.S. fallout in 2008, when was the last time we heard that the recovery is being led by China exports? Never. Most of our recovery growth is domestically driven. China could impact our economy in the sense that… Read the Article Here
June 14, 2013 – Factoring in fear on Wall Street
SDUT’s Question: Should investors fear a big correction in the stock and bond market. Should they bank their profits and exit now?
Gary London’s Answer: No. Unless you are a professional day trader, rule No. 1 is to invest for the long term. Do not play the game of “banking profits,” because nobody can time the top or bottom of the market exactly, and you are likely to lose in the long run. We have already seen some profit taking this last week…. Read the Article Here
May 26, 2013 – Is Bernanke all wrong?
SDUT’s Question: Is Federal Reserve Board Chairman Ben Bernanke running the “most inappropriate monetary policy in history,” as claimed by a noted Wall Street hedge fund manager?
Gary London’s Answer: No. Bernanke seems to be hell-bent on keeping inflation and interest rates low and has not varied from that position since his first day on the job. He seems to be the only one taking action to stimulate the economy by supporting the housing sector. It is not his fault…. Read the Article Here
May 9, 2013 – Will immigration reform hurt the economy?
SDUT’s Question: An estimate by the Heritage Foundation says the bipartisan Senate immigration reform bill would cost taxpayers $6.3 trillion over 50 years because those offered amnesty would receive more government benefits than they would pay in taxes. Do you agree with this conclusion?
Gary London’s Answer: No. I do not trust this research and I do not believe these conclusions. Mexicans and other immigrants have mostly not received social security and unemployment benefits, although most pay into those funds. They have not been able to claim the benefits…. Read the Article Here
May 3, 2013 – Should shoppers pay Internet sales tax?
SDUT’s Question: Is there an economic benefit to charging local sales taxes on all Internet transactions?
Gary London’s Answer: Yes. On two levels: it means more taxes are being collected, thus raising revenues that are currently escaping the state treasuries; but it also puts bricks and mortar on a more even competitive playing field, at least for now…. Read the Article Here
April 26, 2013 – Economics Panel Grades GDP Reboot.
SDUT’s Question: Does it matter that GDP is being recalculated upward by about 3% to take into account the value of books, movies, software, research and other pieces of the “knowledge-based” economy?
Gary London’s Answer: Yes. It matters a great deal. This is a much better snapshot of true productivity in an economy that is ever more rooted in knowledge- based productivity…. Read the Article Here
April 12, 2013 – Does Obama have it right on Social Security?
SDUT’s Question: Does the proposed scaling back of social security benefits through lower inflation calculations represent a good start to reining in entitlement spending?
Gary London’s Answer: No. It reduces the overall payout, but it doesn’t make sense. The problem with singling out just inflation is that seniors spend a disproportionate amount of their available funds on health care, which is always rising…. Read the Article Here
April 5, 2013 – Will BRAIN project benefit San Diego?
SDUT’s Question: Will research projects like the proposed $100 million annual brain-mapping undertaking bring significant economic benefits to San Diego?
Gary London’s Answer: Yes. But over time, and it depends on how you define “significant.” We obviously are better positioned than most regions for a share of this bounty, with our already in-place scientific research and development capacity within the public and private sectors who will undoubtedly seek funding…. Read the Article Here
March 29, 2013 – Will consumers use homes as ATMs again?
SDUT’s Question: Are you worried that homeowners will again turn to their positive home equity as a piggybank to fund their consumer urges?
Gary London’s Answer: No. We are far too early in the recovery cycle for sufficient home equity to have stockpiled to the level necessary to present a temptation to consumers to binge. In fact, the pendulum has swung from the “easy money” days to the other extreme, where lenders are far more careful as to what loans qualify…. Read the Article Here
March 22, 2013 – EconoMetrists list signs of improvement.
SDUT’s Question: How will we know if the economic recovery in San Diego County is for real?
Gary London’s Answer: Real estate values and transactions. When real estate values and transactional volume consistently increase. Consumers who are selling and buying are bidding up values. This happens when there are base job increases and rising household incomes, each of which supports consumption and drives the economy…. Read the Article Here
March 8, 2013 – Working at Home: Good for Employers?
SDUT’s Question: Is working at home on a flexible schedule economically beneficial to employers as well as employees?
Gary London’s Answer: Yes. Ms. Mayer take note. (That’s Yahoo Marissa Mayer who canceled work-at-home permissions recently.) You may be shaking up a company culture because you need to in an effort to save your company. But the workplace is inevitably evolving, and for many other companies there are economic imperatives to do so.… Read the Article Here
March 1, 2013 – Are Low Interest Rates Good Policy?
SDUT’s Question: Should the Fed continue on its current policy of stimulating economic growth through low interest rates?
Gary London’s Answer: Yes. Provided the low interest rates translate to access to capital by small business and consumers and not just bank profits. Low-cost mortgages are supporting housing prices, and, consequently home building.… Read the Article Here
February 22, 2013 – How Bad Will Sequester Be for SD?
SDUT’s Question: Will San Diego suffer immediately if the federal budget cuts kick in March 1?
Gary London’s Answer: No. Locally, the residual impact of sequestration is mixed, but centers on the military. There are still a huge amount of contracts under way that will take years to complete, including the huge hospital at Camp Pendleton and 3,000 housing units there…. Read the Article Here
February 8, 2013 – Does it pay off to move to Texas?
SDUT’s Question: Do companies gain a big enough economic advantage to justify relocating from California to Texas?
Gary London’s Answer: No. Most studies that I have read suggest that companies rarely relocate anyway, presumably because the cost of doing so (relocating employees, for one thing) supersedes the benefits (subsidies, lowering regulatory costs or taxes)…. Read the Article Here
January 31, 2013 – Economic benefits in immigration reform?
SDUT’s Question: Are there economic benefits to San Diego in the proposed immigration reform proposals before Congress?
Gary London’s Answer: Yes. Our proximity to Mexico means that San Diego disproportionately benefits from reform. First-generation immigrants, in particular, are the hardest working, most motivated members of the work force…. Read the Article Here
January 25, 2013 – Delay debt-ceiling increase: OK?
SDUT’s Question: Do you agree with the plan to extend the federal debt limit by an extra three months to provide more time for budget negotiations?
Gary London’s Answer: Yes. But only to the extent that it takes the issue away, at least for now. My view is that a timeline is unnecessary because there is no need for a drop-dead date…. Read the Article Here
January 18, 2013 – Require paid sick leave?
SDUT’s Question: In light of the widespread flu outbreak, should all employers in California be required to provide paid sick time off?
Gary London’s Answer: Yes. Although I hate the word “required.” There should be the employer commitment to a healthy business environment and, in return, the employee’s promise to maintain a healthy lifestyle…. Read the Article Here
January 3, 2013 – Will 2013 be better than 2012?
SDUT’s Question: Will the U.S. be better off on January 1, 2014 than it is today?
Gary London’s Answer: Yes. The congressional approval of a “temporary restraining order” to fiscal issues suggested two things to me: (1) that our policymakers can’t make big policy, but they will make incremental policy that might have the same effect; and (2) they compromised…. Read the Article Here