Posted: Sunday, April 20, 2008 12:00 am
The most recent predictions from the UCSB Economic Forecast Project are pretty gloomy. In fact, most folks don/t really need a trained economist to tell them when times are bad.
One needs only browse the aisles of local supermarkets to see the effects of soaring energy costs. When truckers have to pay ,4-plus for a gallon of diesel, you aren/t going to get any deals on the staples of everyday life.
Consumers are being forced to pony up small fortunes for gasoline and groceries, but our salaries seem to be losing the sprint race with rising costs. One problem with inflation is that it always seems to affect your paycheck last.
If the economy is soft, the housing market is mush. The UCSB Economic Forecast Project economists report on an absolute disaster for many homeowners. The median price of a North County home plummeted nearly 16 percent from 2006 to last year.
In real dollars, that means your home is worth an average of ,60,000 less today than at the same time two years ago. The result is an eruption of foreclosures, which have increased nearly 500 percent in the past 18 months.
Santa Maria, Lompoc and Guadalupe lead this parade of despair, accounting for nearly 90 percent of all foreclosed properties countywide.
There were other troubling disclosures in last week/s UCSB update. About the only sectors of the local economy in a growth mode are agriculture, government and gambling.
The ag jobs generally don/t pay much, which intensifies the imbalance between workers and housing. Too many of the jobs being created don/t pay enough for the worker to afford to live here.
Public-sector jobs accounted for nearly one-fifth of all new jobs created in the past couple of years. No matter how tough times seem to get, government 7 at almost every level 7 continues to be a growth industry. We/re way past George Orwell/s vision of 1984, but it still resonates.
And despite this current, rather chilling economic downturn, things apparently couldn/t be better at the Chumash Casino, which keeps adding new employees to accommodate the wants and needs of a steady and continuing wave of gamblers. You have to wonder where all that BexpendableC income comes from.
What does it say about a society whose citizens can/t make mortgage payments or afford a full tank of gas, but can still find a dollar or 10 for an electronic whirl on a slot machine? Maybe, for many folks, things are so bad that they/ll take refuge where they can find it.
Even though spring is here, and local temperatures are climbing, it seems we/re in for a rather protracted economic winter. The folks at the Forecast Project aren/t expecting much of a turnaround this year or next.
There is a glimmer of hope that the housing market will get back to normal by mid-2010 7 but don/t expect a return to the glory days of the early and middle parts of this decade, when simply owning a home brought with it a guarantee of double-digit percentage increases in value every year.
It may be awhile until we see those days again.
But, hey, we/ve all been through this before. Several times, in fact. The present has a way of making the past look more appealing, and the future more daunting. Remember when we wrung our hands in despair over having to pay ,2 for a gallon of regular gasoline, or ,1 for a head of iceberg lettuce?
So, economic winter or not, try to enjoy the weather and the wonderful piece of earth we call home. It/s all relative.
April 20, 2008