Couldn’t Help But Notice (121407)
Well, I guess the “inevitable” recession, or the one that most of us apparently think is already happening, isn’t a nationwide phenomenon after all. Colorado has opted out:
Colorado shouldn’t slip into a recession next year even if the rest of the country does, predicted Richard Wobbekind, an economist with the University of Colorado at Boulder’s Leeds School of Business.
“Continued, moderate growth is on tap for the state. Colorado will definitely not enter a recession,” Wobbekind told an audience gathered Monday at the Grand Hyatt Hotel in Denver for the 2008 Colorado Business Economic Outlook.
Yes, there’s a contrarian view in the article too.
But it does remind me of something: Colorado is the home of the first statewide TABOR (”Taxpayers’ Bill of Rights”). You don’t suppose there’s any relationship between the state’s relatively rosy outlook and the fact that it’s been strictly controlling its budgetary growth for about 15 years, do you?
Two years ago, I looked at how Colorado’s economy had done compared to the rest of the country, and compared to Ohio, after its TABOR passed. Answer: Vastly better that the rest of the US during the first 5 years, as good as the rest of the country during the next 7; and 2-3 times better than Ohio during virtually the entire 12-year time frame.
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Speaking of Ohio, I’m seeing warning signs in the latest Office of Budget and Management report (PDF). Through November 30, the first five months of the current fiscal year, General Fund state spending before account transfers is $188 million more than planned; tax revenues before transfers are $117 million lower. That’s a total of $305 million worse than expected.
That’s a lot. There may be revenue and/or expense timing issues that mitigate the situation, but it bears closer scrutiny. Isn’t anyone in Ohio’s Old Media available for digging into the detail?
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This would appear to be evidence that the Fred ‘08 folks are feelin’ it going their way.
Update: So is this — “Thompson slams Romney on $50 abortions in Mass.” It’s about time somebody went after this. In fact, I’m starting to wonder if Thompson’s initial way-back posture on Iowa’s unimportance wasn’t a big head fake.
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I’m really starting to think that Microsoft is holding the economy back, and that the company should start catching some grief for it. Here’s the latest evidence (bold is mine):
Microsoft (NSDQ: MSFT) is warning customers that the soon-to-be released service pack for its Windows Vista operating system won’t fix the application capability issues that have plagued the software since its release in January.
“Applications that have compatibility issues with Windows Vista today will most likely continue to have the same issues with Windows Vista with SP1,” Microsoft warns in a new whitepaper on Vista Service Pack 1.
This means that many more users than expected are stuck in XP. That may be comfortable, but it is definitely holding back tech-driven productivity increases at companies across the land. That is not good.
[…] Bizzyblog notes, this is good stuff from Fred, it’s on point, coherent and funny. So where’s […]
Pingback by NixGuy.com » Fred Signs of Life — December 14, 2007 @ 8:06 am
[…] don’t know. Seemed to work for Colorado. It’s so crazy it just might […]
Pingback by NixGuy.com » Ohio Economy Not Good — December 14, 2007 @ 8:13 am
On the recession angle, have you seen the townhall article: http://www.townhall.com/news/business/2007/12/14/oil_prices_fall_on_inflation_report
I saw two interesting things I would like to bring to your attention.
1. “Energy traders are concerned that rising inflation will cut consumers’ buying power and reduce demand for gasoline and oil. They also worry that higher inflation means the Federal Reserve will stop cutting interest rates. Many analysts cite the Fed’s recent rate-cutting campaign, and its role in depressing the value of the dollar against other currencies, as a major factor behind oil’s rise this fall to record levels.”
It strikes me odd, in a chicken vs egg way, that they are citing inflation concerns when in fact rising oil prices also cause inflation.
2. “A separate OPEC report offered a mixed forecast, slightly raising the Organization of Petroleum Exporting Countries’ global oil demand growth expectations for next year while saying the outlook for economic growth is worsening, particularly in the U.S.”
Given that the US reduced it’s energy consumption in 2006 by 1.6% but the economy grew during the same period, isn’t the old paradigm between energy consumption and economic growth changing? 2006 showed that economic growth and energy consumption are not necessarily equal or proportional, there is such a thing as efficiency and product manufacturing energy intensity. More importantly, just because the cost of fuel or another product rises doesn’t mean the zero sum argument follows that people will spend less on something else, that’s a false dichotomy, it may mean people will adapt to lower their consumption in some fashion of the product whose price is rising as opposed to something else.
Comment by dscott — December 14, 2007 @ 2:41 pm
#3, at some point oil has to be integrated into the inflation calcs and not be seen as an aberration. I would agree with that.
As to your #2, I think (not sure) that the decreased consumption may have been a function of a mild winter that was mild at the right times (when prices were highest). I don’t think it was “global warming scare” mild, but mild enough in the right places at the right times.
Comment by TBlumer — December 14, 2007 @ 2:53 pm