COMMENTARY

An economist tells it like it is

4/15/2014

Through the good graces of one of Toledo’s best citizens, Bob Meeker, I had a chance to chat with Kate Warne, an economist with broad experience — including working for the Council of Economic Advisers under President Ronald Reagan and being part of the team that deregulated the airline industry.

She admits to this last credit a little sheepishly, saying she is sure their team did the right thing for the country, but de-regulation also has resulted in all the things that drive people crazy about airline travel today: long lines, planes packed like sardine cans, and flying to Sheboygan, Wis., to get to Chicago.

Still, she says, she worked for the only federal agency that ever put itself out of business: the Civil Aeronautics Board.

Ms. Warne works for Edward Jones in St. Louis and was here to speak to investors about the current market and the state of the economy. The good news, she says, is that the economy is looking much better — not that it is booming, by any means, but a tentative calm, and even confidence, has begun to descend.

Ms. Warne attributes this, first, to distance from the crash of 2008. The further we get from the train wreck, the less nervous we are about taking another trip. Second, Washington, while not exactly inspiring in its rationality and spirit of cooperation, is at least not spectacularly and theatrically dysfunctional. We are no longer talking about fiscal cliffs and default. There are even rumors of bipartisanship.

Further, Obamacare seems to be here to stay. That uncertainty is also gone.

Housing and auto sales, which slumped in the winter, are picking up, and Ms. Warne sees this as a sign those stutters were seasonal, not structural.

Bottom line: People have begun to invest again and take deep breaths again.

But why has job growth been so slow to rebound? Even as we crawled out of the recession, jobs have been slow to return.

Well, says Ms. Warne, it’s complicated. The recession was not just a recession, but coincident with a banking crisis, which triggered a worldwide financial crisis. When you think of it on that scale, it’s amazing we’re as economically whole as we are.

And, we have had a workplace revolution: more technology; less support staff.

Here are two amazing under-reported facts:

● We have regained all the jobs lost in the recession. We are still looking for new ones, but we got the old ones back.

● Under pressure of recession and job loss, American workers have reached their highest level of productivity in a generation.

These two megatrends are related and doubled-edged.

The big thing we know about new jobs, future jobs, is that they will be technical jobs. If we hope to fill them with U.S. citizens — our children— we need to produce more college graduates, ones who know how to do and make things. Pretty easy to articulate; harder to absorb and act upon.

“Kate is very frank for an economist, isn’t she?” Mr. Meeker asked. She is. And right on the money.

Keith C. Burris is a columnist for The Blade.

Contact him at: kburris@theblade.com or 419-724-6266.