Blue Chip Economic Forecaster Says Media Is Making Crisis Worse
LAS VEGAS -- Granted, the global markets are facing the most serious challenge since the Great Depression, but Blue Chip Economic Forecast contributor Jeff Thredgold told his ACUMA keynote audience that not only will the U.S. weather the storm, but 10 years from now, he'll be discussing the next big economic threat.
"We do this every 10 years, and the national media always predicts the next Great Depression," Thredgold said, reminding the audience of the big stock market crash of 1987, and the 1997 Asian financial crisis.
Thredgold said he's disappointed with the national media's coverage of the current financial crisis, saying the bailout bill would have passed sooner had Congress and the media named it something more positive, like the 'Financial Rescue Package.' Using the term bailout created a difficult situation for lawmakers facing re-election, who didn't want to vote in favor of it due to negative constituent opinions, he said.
Though he admitted that at least one of his Blue Chip colleagues is predicting the next Great Depression, Thredgold said in his opinion, things aren't as worse as they sound. Jobs, for example, are better than statistics indicate, thanks to changes in employment.
"Small business is the job creation machine in this economy, and these days, we have a lot more contract employees and long-term 1099's, who aren't counted in employment stats," he said.
The 6.1% jobless rate is the highest in five years; however, Thredgold said, most recessions include a 10% or higher unemployment rate.
But, he predicted jobs will only grow at a rate of 1% per year for the next 30 years, with most new jobs going to minorities, both foreign and domestic. Large numbers of retiring baby boomers will also create open positions to be filled, many of which will take priority over new positions.
Thredgold didn't see inflation to be much of a threat, either, saying competition and room to shrink will keep prices in line.
"We have a one-third excess capacity in almost every industry in the world," Thredgold said. "Consumers are bolder than they used to be, and the Internet provides a number of choices literally at their fingertips, so they shop around."
Thredgold has a banking background, currently serving as a consultant to the $50 billion Zions Bancorp. and has held a seat on the economic policy committee of the American Bankers Association. As such, he told the audience credit unions have a unique opportunity to pick up market share.
"The subprime lenders are gone, the Alt-A lenders are gone and banks don't have any money to lend," Thredgold said, adding, "And look, I'm a banker. I'm telling you, credit unions are in the driver's seat."