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Business Q&A -- John Mitchell John Mitchell, 57, is an economist with United States National Bank Q: What are the most immediate economic effects, aside from transportation, that Southern Oregonians will experience as a result of Tuesday's terrorist activity? I'm always amazed at the resilience of the American economic system, shock after shock. The response after time has been increased security. Travel will become more of a hassle for a while. Go out a few years and we'll look at this as a horrific event but not a fundamental change in the system. Really, I think the Pearl Harbor analogy is a good one. It forever changed the way we think about defense. But does the American economy fundamentally change? This is not a mobilization kind of thing like World War II when there was a curtailment of consumer and massive government investment in planes, tanks. That's not what we're talking about. Q: Some economists have been quoted in Northwest newspapers that Tuesday's events will push a shaky economy into a recession. What are your thoughts? I didn't think it would, given declining interest rates and other changes. But this changes the odds. From a decision-making standpoint, the consumer's inclination is to delay and hunker down if things are growing slowly. When I was a pilot, I had to go through a flight review and the instructor I was with could take a plane and put it right on the edge of stall. Move it a half-inch and it would go into a stall. Bring it back that much and it would pull out of one. On Tuesday, we may have got that hit into recession. To some extent, this is semantics. We've been growing at 4 percent the last three years. If growth slows down to 11/2 percent that's going to feel very, very different. The rising unemployment and disappointing earnings are a very different environment from the last part of the 1990s. But Medford has fared rather well; it's the most rapidly growing market in the state. Through July, there's a year-over-year gain in employment I think when you look at economic health of respective areas, in the 1990s, Oregon was strong, while California and Washington were very weak. Now it's the reverse: They're stronger than Oregon is, although that's not true of Medford. Oregon is already the weakest state in nation. For the year to July, 10 states are in decline and Oregon was 50th in growth. The major hits have been in tech, the heavy truck business, of course there have been problems in metals, related to electricity. I track Oregon's 32 labor markets and 16 were declining in July. Deschutes County was, but not Medford. Q: What are the long-term - four to 10 years - economic expectations for our region and how much have they changed in the past week? I look at Jackson County as the strongest metro area in the state for a while. Look at the underlying advantage of attracting retirees. For 10 years, Southern Oregon has been right on the cusp of a major wave of that activity. If patterns don't change, it could be the beneficiary of that sort of activity and the climate. Purely off the top of my head, you may have people wanting to live in smaller metropolitan areas. I don't think it's necessarily going to happen. Globally, oil prices have spiked, not because of fundamental change, but because of expectations. and the possibility of retaliation, much as in the summer of 1990. We won't know if that lasts, but that's a damper for much of the United States. And if we get additional declines in the stock market - should that happen - it compounds the effect of the loss of wealth. Q: What has protected the Southern Oregon economy? I suspect it's because the population base is different. Dividends and transfer payments are important because of the retirement population and tourism has been fairly strong. Those are some of the ways Southern Oregon has been making it through. But the NASDAQ has lost 57 percent and the Dow 14 percent the last 12 months. If recent events add additional impetus to that, you've got to worry about the wealth effect. That might be more important in Jackson County than it is other places. Q: We have a large population of telecommuters in Southern Oregon, who still must travel occasionally for business. Will recent events spur more telecommuting or force people to be closer to their work? I suspect, at least in the short run because of the extent of the cost and hassle, people may have more of a degree of reluctance for a while to travel. We will likely increase telecommuting types of activities. That march of technology that makes that underlying trend possible is still in place. You think of how people behave. When we had all the worries of the Gulf War, there was a temporary drop-off in travel. Then back to business as usual. We're not going to stop flying. 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