Obviously, we are all concerned about the state of the economy, dealing with conflicting signals, rhetoric, and policy antidotes. The President says growth is improving, but not fast enough. The Federal Reserve continues to prime the pump. The Republicans want to cut taxes and spending, while prominent economists and many Democrats argue for more stimulus spending, not less. Ireland follows Greece into the EU bailout tank and Spain may be next—capital markets fear the reverberations.
When you cut through all the posturing and confusion—the unemployment rate stands stubbornly near 10%, the housing market shows no signs of near-term recovery off its crash, and the nation’s biggest money making industry—financial services—has revived thanks to federal infusions, unsustainably low interest rates and lots of asset trading—which by the way doesn’t create anything except Wall Street bonuses. Christmas sales inflate off retailer mark downs, and state and local governments undertake massive retrenchment with the federal government set to follow. All this is not exactly a prescription for a cheery 2011.
Whether you agree with Fed quantitative easing policy or not, the bank’s action speaks loudly about its concern for overall economic drift and lack of any momentum. What’s scary is they really don’t have any confidence about solutions or strategies.
Two weeks ago l was on a program with Eric S. Rosengren, the President and CEO of the Federal Reserve Bank of Boston, where he gave a lucid and compelling defense for quantitative easing as the best chance for helping spur jobs growth and get us out of the ditch, especially given our current low inflation. I asked him my favorite Emerging Trends question—so where are the high paying jobs coming from to support our economy in the future? His answer was a familiar one, the same one I get from many of the real estate industry pros I interview each year—the U.S. has the world’s most resilient, dynamic economy with the capacity to create new industries and new jobs. Translation: I hope it’s just a matter of time and its part of my job to keep things positive, but I really don’t have the answer.
I certainly don’t fault Mr. Rosengren—the Fed is in un-chartered waters and trying to pull out all the stops, arguably doing the best they can against strong political head winds. But the U.S. better stop resting on its laurels and counting on inevitable, pre-ordained resurrection. Government leaders refuse to confront the public with our new reality—the country is falling behind global competitors on a host of scorecards—we are manufacturing less, our standard of living ebbs, our essential infrastructure is outmoded and under funded, and we cannot afford our defense budget or social program outlays. At the same time, our education system is failing to prepare our young people for the new world order and our healthcare system ranks low for overall care compared to international benchmarks. We do lead in two areas—we’re the world’s biggest debtor nation and the world’s largest energy consumer.
To stay number one, we have got to change our ways and recognizing our plight is step one. That’s what our leaders have to help us do and we need to be receptive. Let’s see what happens to the bipartisan deficit-reduction commission report, which has many ideas that can point us in a better direction.
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
