I attended the 2019 South County Economic Summit produced by the UCSB Economic Forecast in May 2019. The first thing I noticed was the group seemed larger than I had expected. Why? Because there were only two speakers plus Peter Rupert as an MC, speaker and panel moderator. I had received an invitation for both the South County and North County events and noticed that there were four speakers plus Mr. Rupert at the North County event and only two speakers plus Mr. Rupert at the South County event.
I decided that I’d attend the South County event as this is the base of most of my business. Note that the UCSB Economic Forecast Project also provided attendees a 138-page study of South Santa Barbara County with lots of helpful material geared towards our local geographic area.
The North County event, which cost $50, featured speakers with a strictly regional overview except for perhaps Mr. Rupert. The South County event, which cost $200, featured a national overview with Mr. Rupert reflecting on Santa Barbara South Coast issues.
The South County speakers presented a banking perspective of the national, regional and local economies with Neel Kashkari , President, Federal Reserve Bank of Minneapolis and Kathy Moe, Regional Director, FDIC San Francisco. And of course, there was Peter Rupert, Executive Director UCSB Economic Forecast Project. Kudos to UCSB for producing this event and the sponsors and board. There is an incredible amount of preparation and coordination that goes into this premier annual economic forecast which appears so professional and seamless. I have been blessed with being able to look behind the curtains, so I know!
I’m here writing this synopsis after the event looking at the South and North County invitations and can’t help but compare the two. The South County event usually has more speakers and reflects a national and at sometimes, international overview coupled with Mr. Rupert’s observations on the local arena. Sometimes there have been speakers in more outlier professions like social media and cutting-edge projects like the Allosphere Research Facility at UCSB. I find economics interesting, but I’ve found some of these other speakers truly fascinating! Full disclosure: I was an English Literature major at UCSB so maybe that explains it!
Everyone I mention the event to who did not attend wants a short summary. That is easier this time with the more limited panel. The overriding question at this juncture is “When will the recovery end?”
Mr. Rupert’s is always entertaining as well as informative. His views of the current global economy were “Kinda Sucks” as opposed to the U.S. economy as “Doesn’t Suck” so there’s your short answer! Of course, he did provide lots of material and slides to support those statements.
Both speakers and Mr. Rupert honestly answered that they don’t know when a recession will occur. Kathy Moe gave a very reasoned presentation as to, while the recovery is likely in the latter portion of this economic segment, there are no consistent indicators of an imminent recession. She cautioned that the larger national banks remain at risk in a recession because capital and reserve requirements need to be increased. These banks remain “too big to fail” in a recession like in 2005 and might require taxpayer bailouts if this doesn’t change. However, the current administration is not supportive of increased restrictions.
Neel Kashkari made a personal (non-official) argument that a mistake was made in the string of interest rate increases that occurred in 2018. He argued that the focus on a 2% inflation rate should not be a static target and that many other considerations factor into the equation as to when the economy needs some braking.
Mr. Rupert provided a very convincing set of slides supporting his view that “…when viewed through a historical lens, our economy appears more capable of maintaining long expansions.”[1] This overview was supported by both speakers although all speakers couched their optimism with various qualifications.
So, with that overview and the fact that the rain stopped at the end of the event, I’m very pleased and happy to report a likely positive U.S. economic forecast for the next 12 months!
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Brian Bailey is the broker-owner of Central Coast Investments. He is one of the leading multifamily brokers on the Central Coast covering Santa Barbara, Ventura and San Luis Obispo counties. He has had four decades of success and has been a member of the Santa Barbara Rental Property Association since 1983.
____________________________________________________________________________________[1] Economic Summit, South Santa Barbara County, page 2