My pal sends me a link to the following article:
A Map of America’s Future: Where Growth Will Be Over the Next Decade
I read it and get back to him:
Thanks for the article. What’s your take on it?
Have not studied it yet but (1) seems to be promising in a lot of places, if not everywhere; and (2) The Left Coast looks very attractive (as usual).
I get back to him again with my take:
Right. To me, it’s a good snapshot of the situation around the country today, and I’m glad to get it. However, it purports to be a forecast (Where growth will be over the next decade…), and that is misleading. It is a linear projection of today, and is missing important inputs.
Social mood will drive the economic growth, not the conditions of the moment. Given the outlook for a further sharp decline in social mood, the authors would be more helpful to their readers if they took it into account.
The areas with the most projected growth–Inland West and Third Coast–are energy boom areas. As soon as oil drops below $100, something that may happen before year end, the boom dies big time, and probably stays dead for years. Every big energy consuming country, including China, is experiencing steady declines in energy consumption, which is closely mirroring the behavior of their stock markets (we are the last man standing here–China is down 30% and looks weak, etc.). The markets, of course, reflect social mood, and the patterns everywhere, including here, are bearish.
The Left Coast, where high tech holds sway, is the same place where aerospace was dominant during the heyday of that industry. High Tech looks to me to be in about the same place today as Boeing, Lockheed and Martin Marietta were in the late sixties–about due for an extended period of underperformance, particularly since high tech today is so widely held to be downturn proof.
I’d like to see the authors revisit this article in 2016. If they follow the same modus–projecting linearly–they’ll be telling their readers that the economy will universally suck forever just when it is putting in a bottom and just when a solid recovery is the real prospect.
Don’t mind me. I’m not a congenital bear. I just try to be on the side of the trend with the highest probability. I’ve been waiting a long time to be optimistic on the nation’s economy. When it comes, the linear projectors will (I think) have it as wrong then as they do today.
PS: Re-reading this, I think I ought to post it. Do you mind?
My pal answers: