The document provides an overview of Tulare County's economic situation. It discusses how Bill Watkins will provide context on the county's economy and challenges it faces. It then outlines topics to cover, including the state of the US and California economies and how real estate values will be slow to recover. In the final section, it will analyze specifically Tulare County's economic indicators and situation.
5. Kierkegaard Sartre
Existentialism and Economic
Nietzsche Growth Camus
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6. Bill Says:
“Effective policy cannot be
made without a clear
understanding of the
situation and the challenges
that the situation imposes.”
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7. Outline
• Europe
• Is the consumer ready?
• How Are Our Indicators Doing?
• United States
• Why Real Estate Won‟t
Recover Soon
• California
• Tulare County
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9. Optimal Currency Zone
• Inflation rates
• Openness to trade
• Diversification
• Integrated financial sectors &
policy
• Mobile labor and capital
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10. Fundamental Trilemma of
International Finance
1. Make the country‟s economy
open to international flows of
capital
2. Use monetary policy as a tool to
help stabilize the economy
3. Maintain stability in the currency
exchange rate
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11. Bill Says:
“The Eurozone will come
apart, and it will be ugly”
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12. Is the consumer ready to
bring us outwww.clucerf.org
of recession?
13. Total Consumer Debt is Probably Too High
United States
Household Consumer Debt: Total
Thousands of dollars per household
25.0
20.0
15.0
10.0
5.0
0.0
Jan-80 Jan-85 Jan-90 Jan-95 Jan-00 Jan-05 Jan-10
14. Mortgage Debt is Probably Too High
United States
Household Debt Share: Mortgages
Percent of Current Income
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
1980Q1 1986Q1 1992Q1 1998Q1 2004Q1 2010Q1
15. We‟re Still Down Over 6 Million Jobs
United States Non-Farm Jobs
Millions of Jobs
Seasonally Adjusted Data
140
138
136
134
132
130
128
126
124
Jan-07 Jun-07 Nov-07Apr-08 Sep-08 Feb-09 Jul-09 Dec-09May-10Oct-10Mar-11
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21. Bank Charge-offs Still Too High
Billions of Dollars United States
60.0
50.0
40.0
30.0
20.0
10.0
0.0
1984Q1 1986Q4 1989Q3 1992Q2 1995Q1 1997Q4 2000Q3 2003Q2 2006Q12008 Q4
U.S. Total Bank Charge-Offs
22. Home Ownership Still Too High
United States
Home Ownership Rate, NSA
Percent of Households
70.0
69.0
68.0
67.0
66.0
65.0
64.0
63.0
62.0
61.0
60.0
59.0
1965Q1 1971Q1 1977Q1 1983Q1 1989Q1 1995Q1 2001Q1 2007Q1
23. Capacity Utilization Still Too Low
United States
90
85
80
75
70
65
60
Jan-67 Jan-71 Jan-75 Jan-79 Jan-83 Jan-87 Jan-91 Jan-95 Jan-99 Jan-03 Jan-07 Jan-11
Capacity Utilization: Total index, (% Capacity, SA)
24. Risk Premiums are Going Crazy Again
Ted Spread normalized by 3
month Treasury
1980Q1 1983Q4 1987Q3 1991Q2 1995Q1 1998Q4 2002Q3 2006Q2 2010Q1
Annual Yield as a percent of 3-mo. Treasury
29. Slow Economic Growth
Real Gross Domestic Product
3.6 3.8 3.9 3.8
3.0 2.7 2.9
2.5 2.3 2.4 2.5
1.7 1.7 1.9
1.3 1.0 1.2
0.5 0.4 0.5 0.8
-0.7
-1.8
-3.7
-6.7
-8.9
2007Q1 2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1
Center for Economic Research and Forecasting
United States - (saar q-o-q percent change)
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30. Really Slow Job Growth
Average Monthly Non-Farm Job Change
170 181
139 166 136
96 101 97 105 109 124
44 22 67 85
39
-2
-47 -46
-135
-199
-256
-311
-516
-643
-781
2007Q1 2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1
Center for Economic Research and Forecasting
United States - (thousands of jobs)
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31. No Job Recovery Soon
Non-Farm Jobs-SA
140.0
138.0
136.0
134.0
132.0
130.0
128.0
126.0
124.0
2000Q1 2002Q2 2004Q3 2006Q4 2009Q1 2011Q2
Center for Economic Research and Forecasting
United States - (millions of jobs)
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32. Persistent High Unemployment
Unemployment Rate - SA
10.0
9.7 9.7 9.6 9.6 9.6
9.3 9.2 9.0
8.9 9.1 9.1 8.8 8.6
8.5 8.3
8.2 8.1
6.9
6.0
5.3
4.8 5.0
4.5 4.5 4.7
2007Q1 2007Q4 2008Q3 2009Q2 2010Q1 2010Q4 2011Q3 2012Q2 2013Q1
Center for Economic Research and Forecasting
United States - (Percent of labor force)
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33. Uncomfortable Facts
• Any unemployment decline will
come from discouraged workers
• The difference between zero and
negative is really small
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34. Risk to the National Forecast
• Middle East
• Euro Zone
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36. Department Overlay as %GDP 2010
10.2
8.0
5.8
5.2
4.5
Total Government Dept. of Defense Dept. of Health and Social Security Other spending
Deficit Human Services Administration
37. Why isn’t small
business
participating in
the recovery?
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41. Milton Friedman
“"The role of the economist in discussions of
public policy seems to me to be to prescribe
what should be done in light of what can be
done, politics aside, and not to predict what
is „politically feasible' and
then to recommend it.".”
42. How to Change the Forecast
• Immigration
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43. Foreign Immigration
1.68
1.611.60 1.621.59
1.521.511.55
1.51
1.36
1.26
1.12 1.08
1.030.991.05
0.92 0.94
0.87
0.70
0.66
0.50 0.53 0.520.53
0.440.450.44 0.48
1982 1986 1990 1994 1998 2002 2006 2010
Center for Economic Research and Forecasting
United States - (millions of persons)
44. How to Change the Forecast
• Immigration
• Taxes
• Energy
• Regulation
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56. Just the Facts
• 12 percent
• 8 of 58
• 4 out of 6
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57. Just the Facts
• 16.1 percent to 15.1 percent
• from 15 to 26 percent in 2007
• 34 percent and 80 percent
• 150,000 and 50,000
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58. Other Signs of Decline
• Beaches
• Los Angeles water lines
• Freeways
• Electrical cutbacks
• Water supply
• Education
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59. California Nonfarm Jobs as a
11.6%
share of United States
11.4%
11.2%
11.0%
10.8%
10.6%
10.4%
10.2%
10.0%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Center for Economic Research and Forecasting
California - (percent of U.S.)
60. Non-Farm Jobs
15.1 15.2 15.0
14.5 14.6 14.5 14.4 14.5 14.8
14.0 14.1 13.9
13.6
13.1
12.7
12.2 12.0 12.2 12.4
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Center for Economic Research and Forecasting
California - (millions of persons)
62. Bill Says:
California is moving toward a
future of contrasts: wealth,
without economic growth;
consumption, without investment;
the wealthy and the poor living
side by side, without a middle
class; young adults and old
people, without families and
children.
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63. Really Slow Economic Growth
Real Gross Domestic Product
Growth
3.2 2.9 3.2
2.7
1.7 2.1 2.0 2.0 2.2 2.2 2.3
1.2 1.5 1.5
0.7 0.7
0.2 0.5 0.2 0.2
-0.1
-1.5 -1.8
-4.1
-8.9
-9.7
2007Q1 2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1
Center for Economic Research and Forecasting
California - (saar q-o-q percent change)
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73. Some Other Indicators of
Economic Stress
Teen Percent on Percent on
Pregnancy Food Stamps School Meals
2011 1/11/2011 October 2010
Tulare 72 % 22.7 % 77.62 %
California 41 % 9.55 % 55.9 %
United States 34 % 14.10 %
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96. Tulare County‟s Situation
• Absent change, economic
prospects are grim.
• No inertia will come from the
outside.
• The task is not impossible, but you
have your work cut out for you.
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