A t a dinner hosted by Regions Bank on Sept. 3 at the Jackson Country Club, Regions Senior Vice President and Chief Economist Richard Moody was joined by Senior Vice President for Public Policy Chris Scribner to present some of their prognostications for both the state and national economic scene, and the political picture as it stacks up for the coming elections and beyond.
Moody painted a somewhat positive picture of the economic climate for the “next couple of years.” He sees continued but modest improvement in employment during the next couple of years, pointing out that “the probability of finding work has risen steadily across all durations of unemployment since early 2010.”
At the same time, however, he also suggested that it isn’t “the rate at which we are climbing out of the hole….but rather that the hole we have fallen into is so much deeper than it was in prior cycles.” He pointed out that “recent years have seen a significant increase in the share of those transitioning from unemployed to out of the labor force.”
On the whole, Moody sees “the fundamentals being better than they have in quite some time.” With that said, however, he admitted to being “surprised by the weakness in single family construction” and says that “we should have seen more improvement in that sector.”
As an economist, however, he also offered some “down the road” thoughts. He pointed out that in eight or 10 years, we’ll see the “full impact” of the baby boom retirement, with the inevitable massive increase in public spending on Social Security and Medicare. He foresees little chance that entitlement spending reforms will be enacted that can make a significant difference during the next two years, and failing those reforms, implied that the country will be in for some rough economic sledding a decade from now as “public spending spirals out of control.”
Scribner’s perspectives revolve around the political and policy arena. While hedging his bets, he suggested that there is a “60% chance that the GOP will capture the Senate in the upcoming elections.” He then posed the question “does this matter?” and his answer was “probably not much, although we’re probably in for some interesting times during the next two years.”
One reason for concern is the growth of the “4th Branch” of government, that is, the “regulatory state.” By this he refers to the growth of the federal bureaucracy which “governs with increasing autonomy and decreasing transparency.”
Among other comparisons, he pointed out that the present Congress passed just 138 laws, while Federal agencies passed over 2900 rules, of which 61 were classified as “major regulations.” He sees reason for concern in this trend, along with the fact that federal agencies during the past year were responsible for almost 10 times the number of “adjudicatory proceedings” as federal judges.
Perhaps the important take-away from the evening was that there are reasons for optimism in the short term, but also reasons for concern over the challenges that await our state and nation down the road.
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