EconoMeter | 2014


December 26, 2014 – EconoMeter panelists peer into 2015
SDUT’s Question: What one economic indicator will you be focusing on most in 2015?
Gary London’s Answer: Opportunistic inflation. The Fed has an opportunity to bring the unemployment rate down to 5 percent or lower. The idea is that the labor market will continue to… Read the Article Here

December 19, 2014 – EconoMeter: Biggest surprise of 2014
SDUT’s Question: What was the biggest surprise, economically, in 2014?
Gary London’s Answer: Oil. All economic events flowed from the dramatic decline in oil prices, and perhaps the economic footing of a nation or two! The year 2014 has seen a confluence of positive energy events – shale, domestic production, end of cartel, technology, alternative sources, conservation — all of which… Read the Article Here

December 12, 2014 – U.S. economy out of the woods?
SDUT’s Question: Does the latest jobs report signal that the U.S. economy is in solid growth mode?
Gary London’s Answer: Yes. The 300,000-plus numbers we are now experiencing are an unequivocal sign of sold economic growth. One great silver lining is the reemergence of domestic industrial production in some rust belt areas, where jobs were formerly… Read the Article Here

December 5, 2014 – Early sales a win for retailers?
SDUT’s Question: Are early promotions in the holiday season a wise business strategy for most retailers?
Gary London’s Answer: Yes. By most accounts, they seem to work because people like to believe. Believing in holiday sales is a little like believing in Santa Claus: it’s a nice feeling that… Read the Article Here

November 28, 2014 – Immigration reform: Economic downsides?
SDUT’s Question: Are there any economic downsides to President Obama’s immigration reforms?
Gary London’s Answer: Yes. There is the certainty that some immigrants will be poor and dependent. This is always the diciest part of allowing immigrants in. I think it is important to remember that there are two overarching reasons that people immigrate: One is… Read the Article Here

November 14, 2014 – Should GOP Congress tackle tax reform?
SDUT’s Question: Should the newly GOP-controlled Congress tackle tax reform in 2015 – and if so, what’s the one change you’d propose? (If not, why not?)
Gary London’s Answer: Yes. My broken record answer is that complete tax reform is needed, particularly simplification. But I wouldn’t expect much. If they should tackle lower corporate taxes, even if both parties agree on the concept, they… Read the Article Here

November 7, 2014 – Interest rates on the rise?
SDUT’s Question: Now that the Federal Reserve has ended its bond-buying stimulus program, QE3, will interest rates rise substantially anytime soon?
Gary London’s Answer: No. The Fed’s timing could not have been better. There is the threat of a global recession in Europe. Brazil and Russia are out of favor right now, too. When this happens… Read the Article Here

October 31, 2014 – Election’s economic impact
SDUT’s Question: Will the results of the election make a difference in the economy’s performance in 2015?
Gary London’s Answer: No. Certainly not an immediate difference. I think the bigger impact will be the Fed’s phasing out of their QE (quantitative easing) programs, which have served their purpose, and to find, with that program ending, if our economic growth… Read the Article Here

October 24, 2014 – Ebola: The economic fallout
SDUT’s Question: Is there an economic downside, both locally and globally, to the growing Ebola scare?
Gary London’s Answer: No. I actually see an economic upside: The international community is coming to the aid of West African hot zone countries, boosting their medical delivery systems. This can only… Read the Article Here

October 17, 2014 – Oil price drop: A good thing?
SDUT’s Question: Is the drop in oil prices a good thing for the economy?
Gary London’s Answer: No. I’m holding my nose on this answer. While that money saved will translate into more spending elsewhere in the economy, that’s in the short run. Now, just look… Read the Article Here

October 10, 2014 – Security breaches: Econ downer?
SDUT’s Question: Will continued security breaches at banks, retailers and other businesses start to harm the economy anytime soon?
Gary London’s Answer: No. Actually, I expect the opposite. A robust upgrade of security systems is underway and new technological solutions are emerging that will go a long way to… Read the Article Here

October 3, 2014 – Stock volatility an econ signal?
SDUT’s Question: Does greater stock market volatility mean the economy is getting more unstable
Gary London’s Answer: No. This fluctuation is not tied to the economy. The stock market is simply elevated and overvalued relative to the recent averages, e.g. the… Read the Article Here

September 26, 2014 – Leveraged pensions — OK?
SDUT’s Question: Should public pension managers invest in high-paying but risky leveraged investments?
Gary London’s Answer: No. Haven’t we seen this recording before in Orange County and locally? It is so easy not to get in trouble by following normal, relatively safe and fiscally prudent investment approaches. Why would… Read the Article Here

September 19, 2014 – NFL profits threatened?
SDUT’s Question: Will the NFL’s handling of the Ray Rice domestic violence situation affect its bottom line?
Gary London’s Answer: No. While the NFL has fumbled, punted, penalized, changed plays and called audibles numerous times over the past two weeks, I doubt very much there will be any long-term damage to them, at least economically. Remember that… Read the Article Here

September 5, 2014 – Taxis vs. Uber: An econo-debate?
SDUT’s Question: Is deregulating taxi cabs the right response to the rise of ride-sharing services like Uber and Lyft
Gary London’s Answer: Yes. My preference would be to fully eliminate the cab industry as such. The city no longer has any business regulating cabs or its nascent competitors, Uber and Lyft. A better pricing and regulatory mechanism would be to … Read the Article Here

August 29, 2014 – Tax cuts for all?
SDUT’s Question: Would across-the-board tax cuts, including for the wealthy, help spur economic growth, as Rep. Paul Ryan suggests?
Gary London’s Answer: No. Rep. Ryan is engaging in tax fiction for political points. The effective tax rate, especially for the top 2 percent of Americans, has little relationship with what is actually paid. The tax code is … Read the Article Here

August 22, 2014 – Slowdown abroad: Impact on U.S.?
SDUT’s Question: Are you concerned that economic slowdown in Europe, Asia and South America could hamper the U.S. economic recovery in the months ahead?
Gary London’s Answer: No. I think the slow growth around the globe has been factored into the U.S. economic outlook, and certainly by most international businesses based here. Moreover, the skirmishes in the Middle East and Ukraine … Read the Article Here

August 15, 2014 – Should business put minimum wage on city ballot?
SDUT’s Question: Should the business community mount a referendum campaign against the proposed minimum-wage increase in San Diego?
Gary London’s Answer: No. The business community should work with the City Council to prevent a veto override. Then, the city should lobby the state to address the minimum-wage issue. A city has no business… Read the Article Here

August 8, 2014 – Slow job growth rate disappoints
SDUT’s Question: Are you concerned that jobs are not growing as fast as this economic recovery should be generating? (What more could be done to produce more jobs?)
Gary London’s Answer: No. Not at this point, since the numbers are now, well, where we would have wanted them to be a couple of years ago. The economic crisis which preceded the current recovery wiped out many jobs in… Read the Article Here

August 1, 2014 – Aversion to ‘tax inversion’
SDUT’s Question: Should Congress clamp down on “tax inversion” -companies reincorporating in lower-taxing countries?
Gary London’s Answer: No. The carrot works far better than the stick: Congress should lower domestic tax rates for companies so that there is no incentive to dodge taxes. The U.S. tax system is convoluted, inefficient, unauditable and riddled… Read the Article Here

July 11, 2014 – Immigrant crisis: An econ spin
SDUT’s Question: Is there a long-term economic impact of thousands of undocumented children entering the U.S. from Central America?
Gary London’s Answer: Yes. Short term negative, long term positive. While tensions are high with no clear resolution of border security and immigration policy, there is a cost. Social service, health and education systems are further… Read the Article Here

July 4, 2014 – Health check: U.S. economy @ midyear
SDUT’s Question: What is the most surprising thing about the economy for the first half of 2014?
Gary London’s Answer: No Surprises. Perhaps most surprising is that there have been no real surprises. The local economy continues to strengthen at an acceptable, if plodding, pace. The construction sector… Read the Article Here

June 27, 2014 – EconoMeter: 4-year community college degree – good or bad?
SDUT’s Question: Is there an economic benefit in allowing community college districts to grant four-year degrees?
Gary London’s Answer: Yes. There is evidently a shortage in the number of higher education institutions, as evidenced by extremely competitive admission processes and the ever-rising costs of… Read the Article Here

June 20, 2014 – EconoMeter: EconoMeter: Iraq insurgency watch
SDUT’s Question: Does the turmoil in Iraq, with a possible impact on oil prices, pose any threat to the economic recovery?
Gary London’s Answer: Yes. The U.S. has reduced its foreign energy dependence, so perhaps the ripple effect throughout the economy might be more muted than historically. Oil pricing is a mysterious… Read the Article Here

June 13, 2014 – EconoMeter: Student college loan relief a good thing?
SDUT’s Question: Would the new proposal to relieve students of college debt benefit the overall economy?
Gary London’s Answer: Yes. Although modestly because it doesn’t impact enough of the debt. But it is a wakeup call. The costs associated with the higher education system in this nation are unsustainable. If the loan programs… Read the Article Here

June 5, 2014 – Econometer: Replace VA with vouchers?
SDUT’s Question: Would veterans be better off if the VA health system was replaced with a privatized voucher system?
Gary London’s Answer: Yes. While I have had no personal experiences with the VA health system, with the probable exception of military, safety and other essential programs, privatization is a worthy goal. As the nation… Read the Article Here

May 30, 2014 – EconoMeter panel looks at home prices rising
SDUT’s Question: Do think the home-price appreciation slowdown in San Diego County will continue for at least the next year?
Gary London’s Answer: Yes. In the early recovery stage, pricing spiked. But the trajectory still points to ever-increasing housing prices at slower rates. Housing prices will eventually exceed the bubble peak of 2006, certainly… Read the Article Here

May 25, 2014 – EconoMeter panel mops up after fires
SDUT’s Question: Will the May fires cause a major dent in San Diego County’s economic recovery?
Gary London’s Answer: No. Relative to other parts of the nation which are regularly stymied by snow, floods, tornadoes and hurricanes, my sense is that our climate change adjustments will be more predictable and manageable. We know… Read the Article Here

May 2, 2014 – Local minimum wage: Fair or foul?
SDUT’s Question: Will a city-level minimum wage affect San Diego’s competitiveness?
Gary London’s Answer: No. There are compelling arguments for increasing the minimum wage, certainly among liberals who argue that more money is needed to enjoy a decent quality of life. But I have also heard conservatives argue that wage increases create more consumption, which is… Read the Article Here

April 25, 2014 – Should we subsidize breweries?
SDUT’s Question: Is it good local economic policy to subsidize particular industries, such as breweries?
Gary London’s Answer: Yes. Public agencies have a responsibility to employ their fiscal and land use powers for economic good. However, since the incentives offered inherently benefit some over others, the reasons had better be persuasive. So, I have no problem with… Read the Article Here

April 18, 2014 – Pay the Chargers to keep playing?
SDUT’s Question: Economically speaking, should San Diego pay the Chargers to continue playing locally in the form of land subsidies and other supports?
Gary London’s Answer: Yes. Although only if the deal is right. The 163-acre property that Qualcomm stadium partly sits on is perhaps the best, most strategically located undeveloped property in the San Diego region. My company has participated in conceptual plans for the development of the site and we … Read the Article Here

April 11, 2014 – Is SD over the hump on unemployment?
SDUT’s Question: Are San Diego’s unemployment problems at an end?
Gary London’s Answer: Yes. We have now almost returned to pre-recession employment levels, but the job profiles have changed. It has not been an even exchange, but a gradual unwinding of jobs in certain clusters (mostly manufacturing, which is slowly … Read the Article Here

March 21, 2014 – SD as #1 startup haven?
SDUT’s Question: Do you agree that San Diego is the nation’s startup haven, despite the high cost of housing, doing business and other headwinds?
Gary London’s Answer: Yes. Our region’s economic dilemma is not a lack of startups. It’s a failure to keep the growing companies here. We are a high- and bio-tech hotbed, with no dearth of entrepreneurs, ideas or capital. But with several … Read the Article Here

March 14, 2014 – College costs a coming bubble?
SDUT’s Question: Is the rapidly rising cost of college, like housing, heading for a bubble that could burst?
Gary London’s Answer: Yes. Colleges have been engaged in “mission creep” offering services that are overly broad, while salaries and other overhead are so high that young persons are funding that “creep” through massive debt. Couple that with … Read the Article Here

March 7, 2014 – EconoMeter panel considers Ukraine effect
SDUT’s Question: Does the Russian invasion of Ukraine raise short-term concerns about the economy, particularly in San Diego?
Gary London’s Answer: Yes. A geopolitical crisis tends to wreak havoc on economic forecasting. This winter’s mostly weather-related economic slowdown was probably a setup for a rush of spring consumer spending, but now … Read the Article Here

February 28, 2014 – Econometer takes on labor force drop
SDUT’s Question: Will the economy benefit from a drop in labor force participation in the next decade?
Gary London’s Answer: No. The impending retirement of aging baby boomers (regrettably I am one) is a long anticipated demographic reality. But the difference for this generation is that presumably we will live longer and healthier, and from my discussions… Read the Article Here

February 21, 2014 – State water shortage: An economic fallout?
SDUT’s Question: Will the continuing water shortage in California have major consequences for San Diego’s economy in the immediate future?
Gary London’s Answer: Yes. But they may be good consequences! We ought to look at the water shortage as an economic problem, not a resource problem. The cost of delivering the water here is rapidly approaching the cost of ocean water conversion. Because our local water agencies… Read the Article Her

February 14, 2014 – How Faulconer can keep firms in town
SDUT’s Question: What one thing, if any, can the new mayor of San Diego do to keep local companies from leaving the county for economic reasons?
Gary London’s Answer: Focus on construction. Usually there is not much a mayor can do to prevent a company from leaving, because those reasons are wrapped up in broader business factors that are, frankly, beyond the purview of the mayor. But we can certainly do more to attract new companies and to help them expand. Mayor Faulconer might start by … Read the Article Here

February 7, 2014 – Will Russia’s Sochi investment pay off?
SDUT’s Question: Will Russia see a net economic benefit from the winter Olympics at Sochi?
Gary London’s Answer: No. I think it is impossible to recover that by any direct or indirect source of revenues. Nations elect to host the Olympics to achieve broader political statements, usually around the theme “we have arrived.” That said, … Read the Article Here

January 31, 2014 – Why play the Super Bowl in different cities?
SDUT’s Question: Economically speaking, does it make sense for the NFL to move the Super Bowl each year from one city to another?
Gary London’s Answer: Yes. Although I selfishly agree with John Madden who declared that the Super Bowl should be held in San Diego every year. There is an active debate as to how much the Super Bowl actually contributes in terms of direct economic impacts, yet no one argues that … Read the Article Here

January 24, 2014 – A San Diego city minimum wage? Boon or boondoggle?
SDUT’s Question: Should San Diego adopt a city minimum wage ordinance?
Gary London’s Answer: No. While it is important for businesses to offer up more than the minimum wage, enacting such an ordinance could backfire. My concern is that often when the public agency… Read the Article Here

January 17, 2014 – Sluggish population means slow economy?
SDUT’s Question: Is San Diego County’s long-term economic health in danger due to very slow population growth?
Gary London’s Answer: No. The San Diego Association of Governments is projecting a gain of 775,000 from 2010 to 2030. It is owed to two factors, natural increase (births vs. deaths) and in-migration. Since 2000 the region has… Read the Article Here

January 10, 2014 – Will stocks ‘correct’ by 10% by June?
SDUT’s Question: Will the stock market experience a 10 percent correction by mid-year?
Gary London’s Answer: No. I do believe there will be a correction – only less than 10 percent. Investors had a great run in 2013. However, many stocks are trading above the… Read the Article Her

January 3, 2014 – Will we be better off in 2014?
SDUT’s Question: Will the U.S. be better off on Jan. 1, 2015, than it is today?
Gary London’s Answer: Yes. I see 2014 as an unequivocally prosperous year, building on the strengths and opportunities emerging from the last few years. My forecast, across the board,… Read the Article Here