There are bright spots to be optimistic about
Published: January 9,2011
The annual banquet for the Mississippi Economic Education Council is a chance to celebrate advances in the economic and financial literacy in our state. We give awards to primary and secondary teachers for their innovative lessons in the field. We listen to teenagers talk about starting their own businesses and about learning to invest. We carry the torch for financial literacy in a state that struggles to get out of last place, and we lead the way nationally in educating our children to compete in a complex world.
In addition, we get the chance to hear from business leaders and economists about our current condition. The question on everyone’s mind is, “When will this end?” We want to know how our country is faring, and we want to know how Mississippi is doing through these difficult times.
This year we heard from Haley Fisackerly, president of Entergy Mississippi, about the state’s economy. What better bellwether than the leader of a utility company whose revenues depend on ALL business activity? Entergy has 440,000 customers in Mississippi. Monitoring clicks on the electric meter is like taking the pulse of an ailing patient.
In Mississippi, business conditions are improving with slight increases in production among manufacturers. Retail businesses are reporting some improvement, as well. Fisackerly places emphasis on the word “slight,” but with these improvements and the decline in commodity prices, he promised some savings on our electric bill.
Fisackerly noted the timidity of business and said, “The only thing certain is uncertainty.” This atmosphere is keeping businesses from hiring, creating the snail’s pace in the recovery. At the same time, he is optimistic about Mississippi’s prospects. We were not as affected by the housing crisis, and we’re starting to see new projects come online. In particular, he mentioned the restart of the Toyota plant near Tupelo.
As for Entergy’s future in Mississippi, Fisackerly noted the need to rebuild infrastructure over the next 25 years. As a result, he expects to see an increase in demand for energy of 50 percent — not bad for a regulated monopoly.
Then we heard from Dr. Scott Anderson, senior economist for Wells Fargo. To describe the economy, he used words like half-hearted, unbalanced, and disappointing. We lost 8.4 million jobs and 20 years of household savings during this recession. On the jobs front, he expects it to take eight years to get back to pre-recession employment levels. We are “not moving the needle” on unemployment yet. Second-quarter GDP growth was slower than expected, and housing demand “evaporated” after the demise of the tax credit.
At this point, my stomach is starting to churn, and I’m feeling the need for serious anti-depressants. Doesn’t this guy have ANY good news? He doesn’t expect a double dip for the overall economy. Whew! That’s a relief. But then he says the housing sector MAY have that double dip, and we are at least a year away from recovery in this area. Over 14 percent of mortgages are delinquent or in foreclosure.
Meanwhile, corporate profits are good, and companies are flush with cash. Auto sales are up. The stock market is up 60 percent from its low. Businesses are starting to spend. While the U.S. is still limping, emerging markets are roaring back and will help with weak demand here in this country.
At this point, he should have said, “Thank you for the fine meal,” and sat down, but instead he suggested ways to help with a recovery. With the Fed about out of ammo, Anderson (not THIS Anderson, mind you) suggested a second stimulus. I held my breath.
Did this guy know where he was? This isn’t Massachusetts. This is Mississippi! Such talk around here will get a guy into trouble. I expected a mass exodus from the ballroom, but no one moved. Maybe it was our Southern manners, or maybe no one was listening by that point. After all, they neglected to serve coffee with lunch.
Finally, he ended by telling the audience we could put aside our fears about inflation in the near-term. Again, I kept looking around to see if anyone was tossing rolls onto the platform — nothing. The speech was over, and it was time for everyone to head back to work to finish our day.
I spend much of my time with my nose in economic data and my eyes on the stock market, so most of this information was nothing new for me. In fact, there were several bright spots in both commentators speeches that gave me reason to be optimistic. Both acknowledged the difficulty of the past 18 months, but both expressed the belief that we would be fine.
As the room was clearing, I walked over to one of my Mississippi College colleagues, Chris Smith. I smiled and commented about the upbeat news, while Chris hung his head and said, “I’m depressed now.” I guess it’s all in the perspective.
By the way, I hung around and waited for the other Dr. Anderson to make it safely to the elevators. I still think he thought he was in Massachusetts!
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