Is the economic boom over?

Keynote speaker of Outlook Conference warns that panic over coronavirus could be the next threat to economy

Rebecca Neipp

News Review Staff Writer

Is the economic boom over?What a difference two weeks make. On Feb. 27, economist Mark Schniepp told a packed audience at the IWV Economic Outlook Conference that the economy was still booming — on the national scale as well as locally. But the biggest threat to that steady growth was one that he could not have predicted when he addressed us a year ago.

“You can go to Google Trends and find out what people are searching, so I went online and went through a whole list,” said Schniepp. He checked search words ranging from “economy” to “global warming” to “homelessness” to “presidential election” to “stock market” to “next recession,” and none of these made more than a blip on the radar.

But among the popular searches for “football” and “weather” and “Instagram” and “Star Wars” (each of which outranked requests for information on “impeachment”), was a new headliner making its way into the national consciousness — coronavirus.

Fast forward to this week: on Monday, the stock market saw a significant dip. By Thursday, trading had been halted. Oil prices hit another recent low. And public agencies from health care to education are bracing for how to manage a responsible approach to the threat of coronavirus without creating a panic. (See related story)

Schniepp also made a distinction between two kinds of recession — “V” and “U” types. He said that those recessions are characterized by the shape of the letters they are named for — with one having a spike downward and quick recovery; with the other trending downward more gradually, staying depressed for a time and recovering slowly.

If the coronavirus does trigger a recession, many analysts believe it will be a “V” type.

While the impending impact of this new player remains to be fully realized, Schniepp still had plenty of good news to report — as well as some amusing comparisons that contrasted early predictions with the reality of our present culture.

The economist mentioned some of the more notable forecasts that came out of the 1980s and 1990s — books will be dead, we will be under 24/7 surveillance, life expectancy will reach 100, we will vacation on the moon, the world population will top 8 billion, China will be the world’s largest economy, autonomous vehicles will dominate American highways, humans will arrive on Mars, we will breed apes for menial work.

The points about surveillance and population growth may come close, but Schniepp challenged most of those (in particular, the fact that China’s economy is still smaller than ours and shrinking by the day).

So what is going to happen in 2020? Schniepp said that lightning-fast 5G cellular networks will arrive, autonomous vehicles are here (even if they don’t dominate), streaming companies will continue to war over content and consumers while blurring the lines between movies and television.

And while he predicted an end to economic growth by next spring, “the economy will not collapse due to climate change.”

As of his report, unemployment was a record-low 3.5 percent. The U.S. continued to set record-high job creation nearly every month. Household wealth is high, and interest rates are low.

Despite a slowdown in growth on the national scene, the regional economy is also doing well, he said. The IWV population is rising, industries from filming to tourism are up. With one exception (which cited difficulty in recruitment), each of our top employers is at or above last year’s employment numbers.

That does not even take into account the expectation of some 3,000 visitors coming in over the next five years to accomplish some $3 billion of earthquake recovery efforts at China Lake.

“You have a very auspicious outlook for the indefinite future,” said Schniepp. “I don’t see a lot of weakness here.”

Pictured: IWV Economic Outlook Conference keynote speaker Mark Schniepp. — Photo by Laura Austin

Story First Published: 2020-03-13