SALT LAKE CITY — One of the painful realities of life as an economist and professional speaker is that the subject matter of economics is typically viewed (with good reason!) by the general public as confusing, intimidating and boring. As a result, trying to present weekly economic and financial information with an unusual twist can occasionally be a most welcome change.
Warning! This week's column is my semi-annual economic, financial and political update … using today's current movie titles. My sincere apology in advance to anyone I might offend.
The American Economy
Next week finds ANOTHER YEAR at its beginnings, with widespread domestic and global hopes and expectations that LIFE AS WE KNOW IT — or used to know it — will eventually return. U.S. economic growth is expected to improve, with RARE EXPORTS to the world providing an economic lift. THE TOURISTs who visit our nation will also help the economy.
ALL GOOD THINGS associated with rising confidence levels should boost the economy, as well. Positive American political and economic developments of the past two months should lead to stronger employment gains.
THE COMPANY MEN and women who can create private sector jobs now have greater clarity as to tax policy and politics than existed before. Declining uncertainty is always a key to boosting employment levels.
A Greater Republican Voice
Early 2011 also finds a seismic shift to a greater Republican voice in the nation's capital, with new control of the House of Representatives and a larger voice in the Senate. With that expanded voice comes greater responsibility to provide leadership, to bury the DESPICABLE nature of extreme positions and temperaments and to work with THE ROOMMATES they find on both sides of the aisle.
The American people want to see results — SOMEWHERE, sometime — and remain frustrated with some of their hard-earned money, which all too often goes down the RABBIT HOLE of outdated programs and unnecessary spending.
Perhaps real progress will be made in Washington — NEVER SAY NEVER. Perhaps the all-too-often BURLESQUE side show of deal-making and special-interest pandering will give way to TRUE GRIT to address the nation's most vital and pressing issues.
Perhaps THE KING'S SPEECH (the President's early 2011 State of the Union Address) will provide a framework for serious steps to get spending under control. Perhaps slowing the growth rate of entitlement spending in coming decades will be FAIR GAME in Washington, D.C. … as it simply must be.
Perhaps critical decisions will be made in an adult environment, with valuable legislation to slow the growth of government spending with NO STRINGS ATTACHED. Perhaps HEREAFTER legislation will focus on what's best for the people, not what's best for one's re-election … perhaps
2012 Presidential Election
Posturing has already begun as to numerous aspirants for the White House, to be occupied after the 2012 election. The UNKNOWNs include what type of candidate will represent the GOP, the Grand Old Party, the Party of Lincoln, aka the Republicans.
Will it be one who is strongly favored by THE RITE, with little chance of being elected by the middle? Will it be a LINCOLN LAWYER with broader appeal? Will the MEGAMIND now occupying the White House be challenged from the left, who see his alleged movement to the center, his willingness to compromise, as THE DILEMMA of our times?
The Federal Reserve
Chairman Ben Bernanke — THE ILLUSIONIST running the Fed, THE MECHANIC of still mysterious monetary policy, the CASINO JACK of multitrillion-dollar "quantitative easing" programs to stimulate the economy — continues the wary path between deflation and inflation.
His critics will be many if inflation unfolds. His critics will be many when he begins to push up the Fed's key short-term interest rate, possibly late in 2011 or early in 2012. His advice to the Congress, to the American people and to global financial markets to JUST GO WITH IT as far as unprecedented monetary stimulus may get TANGLED. The problem? HOW DO YOU KNOW when enough is enough?
The Deficit Issue
Here's hoping the White House and the Congress can find THE WAY BACK to financial sanity. Here's hoping these two institutions can work together and create a LEGACY of cooperation that will modify our collective distaste for Washington politics.
Here's hoping the domestic and global bond markets will maintain the HAPPYTHANKYOUMOREPLEASE response to the nearly UNSTOPPABLE issuance of new U.S. Treasury bills, notes and bonds to finance a budget deficit expected to average $1,400,000,000,000 annually between 2009 and 2012 — $160,000,000 every 60 minutes — with trillion-dollar annual budget deficits for as far as the eye can see.
Fickle financing markets can be THE TEMPEST that forces national politicians to get serious about government spending. Such markets do not provide a LIMITLESS supply of borrowings at favorable interest rates. Just ask the Greeks … and the Irish …and the Portuguese … and the Spanish — all now facing the DEATHLY HALLOWS of much higher borrowing costs. A DUE DATE of bond market refusal to fund irresponsible government spending is coming all too soon.
Finally, to those American men and women In Harm's Way — THE FIGHTERs — our young people battling valiantly to keep this COUNTRY STRONG, let them be in our thoughts and prayers.
Treat those in uniform with respect. Quietly pick up their tab for lunch. Extend a hand in sincere thanks. It's a great feeling! THE WARRIOR'S WAY they have chosen can be a lonely one … especially at this time of year.
Jeff Thredgold is chief economist for Zions Bank and founder of Thredgold Economic Associates, a professional speaking and economic consulting firm. Visit www.thredgold.com.