A cartoon of a meeting of the Nobel Prize Committee meeting in which one member says, “Do we really need to bother with an economics prize this year?” was how the economics PowerPoint presentation began.
It was the latest in a series of lectures have been presented around the county over the last month by staff of CSUF Mihaylo College of Business and Economics. It was organized and presented by NUFF at the Main Library on Saturday.
The speaker was Dr. Morteza Rahmatian. He is the Chair of the Department of Economics at the school which is the largest business school west of the Mississippi, and the fifth largest business school in the US.
The cartoon is a reflection of the apparent inability of our government, and the finest economists it can employ, to put our national economy on the road to recovery. Another slide in the presentation included the nursery rhyme:
The US economy sat on a wall, The US economy had a great fall, All the King’s horses and all the King’s men, Couldn’t agree on how to put it together again.
The presentation (which can be found online) contains many charts and is mostly readable by the layman. Thankfully they use a fair amount of info-graphics.
One area of concern is Europe. Dr. Rahmatian said, “Pray for Europe. What happens there can affect us here.” He then showed a chart of how much direct and indirect exposure US banks have in Europe and it’s around $640 billion. Further exposure through insurance and other factors to the wider Europe brings the total to 1.8 trillion.
The chart for the long-term unemployment rate, which tracks it back to the 70’s, looks like a skateboard ramp from the X Games. One should keep in mind that each of the charts describe data from the recent past to draw a line that looks like it will continue in a certain direction. But all the known data is past data.
If you believe each line will continue in the same general direction then things don’t look very bright. Most graphs are punctuated by words like “slump”, “long slog”, and “flat-line”. But the group that compiled this report wants to assure us that they see no sign of a double-dip recession.
One bright spot in the report is that these are all the numbers for the national economy. The Orange County economy tends to do slightly better in several areas.
One area that seems puzzling in these reports is the roll of the consumer. We always seem to hear that the consumer is a big part of the economy. That the consumer needs to do more consuming, and yet that the consumer is unemployed, has no equity left in their home, and must de-leverage their debt. This report was one of those reports. We will be finding out more about how the consumer should do this in future articles. For now the Fullertonian suggests you buy local.