Renowned economist talks exclusively to the VBJ ahead of March CREDC event
Alan Beaulieu, economist and international analyst, has been a guest of the Columbia River Economic Development Council (CREDC) once before – in October, 2009. His appearance is remembered as one of the CREDC’s most popular guest speaker events to date, and on March 9th he returns to Southwest Washington for the first time since.
Beaulieu, a principal of the Institute for Trend Research, told the Vancouver Business Journal he plans to not only address things that have changed since his last visit, but he’ll cover a large amount of new material as well.
“This is a post-health care reform world. The Bush tax cuts have been extended for two years. The landscape in Washington [D.C.] has changed. In a regulatory sense and in a political sense, this is a great time to catch up and see what’s going on,” said Beaulieu.
So what exactly is going on? A lot of uncertainty, according to Beaulieu.
“Folks listening to me should understand that worries of double dips and stagnation are way overblown,” he said. “The economy is going to be moving forward in 2011, in 2012 and into 2013. And people need to grasp that.”
Beaulieu warned that if people don’t grasp the reality that opportunities abound, they’re going to leave money on the table.
“People are waiting for someone to come along and tell them, ‘yeah, it is a good time to hire,’” Beaulieu explained. “That’s part of what I’ve been doing… nudging them in the direction they want to go in anyway.”
The optimism in Beaulieu’s words come from what he calls a “clear set of leading indicators” that tell us there is upside activity coming for the next couple of years. However, those indicators don’t always paint a rosy picture – like when it comes to inflation.
“Inflation is definitely heating up – to 2.5 percent in 2011 and up to 4.5 percent in 2012,” he said. “But the inflation that is commonly recognized in the Consumer Price Index (CPI) doesn’t just happen. It’s a progression that begins with commodity prices, then to the Producer Price Index. It has numerous sources and only then does it show up in the CPI.”
Beaulieu believes inflation is already here and waiting for it to hit the CPI is like waiting to get hit in the face, as opposed to seeing the problem coming and adjusting.
However, not all economic indicators hold the same value, according to Beaulieu. The economist said he doesn’t pay any attention to unemployment. In fact, as an indicator, he called it “pretty silly.”
“Most people pay a lot of attention to unemployment, but it’s a lot like driving down the highway with your eye firmly fixed in the rear view mirror,” Beaulieu said. “There’s great accuracy with where you’ve been, but you don’t really know where you’re going. Instead, let’s talk about employment and why it’s going to be getting better.”
