The optimist’s Magic 8 Ball
Predicting the end of a recession, or anything, is tricky. But Michael J. Parks took a stab at it last week at the Columbia River Economic Development Council’s annual luncheon. Parks is an economist who publishes Marple’s Pacific Northwest Letter. He’s also a self-proclaimed optimist, which is unusual these days.
Parks said the economy is in recession by definition, but that we won’t see another Depression. Unemployment isn’t anywhere near 25 percent like it was back then, he said.
(Funny that one who doesn’t expect a depression is now an optimist. That’s like saying you’re funny because you tell knock-knock jokes or that you’re healthy because you don’t have cancer. It speaks to the state of our economy, doesn’t it?)
But Parks is a studied optimist. He thinks we’re close to the end of the recession, which he said began in January 2008. The average post-World War II recession has lasted 10 months, he said. Recessions of the 1970s and early 1980s lasted 16 months, meaning the current situation could end in April 2009.
Also, Washington’s economy has long been above average. Even as it falters, he doesn’t think it will fall that far. It’s partly because the mortgage crisis hit hardest in California, Nevada, Arizona and Florida, not the Northwest. It also comes from increased exports we enjoy when the dollar is weak.
“But suddenly it’s much less satisfying because the bogie is starting to shrink…Average is below the line,” Parks said.
When times are slow in one area, often a boon emerges elsewhere, he said, recalling the 1960s when Boeing’s business contracted two-thirds and its backlog collapsed.
“That turned out to be when the semiconductor boom began,” he said.
And we all know how much Southwest Washington loves semiconductors.
Charity Thompson can be reached at cthompson@vbjusa.com
