By John Hefner
In December of 2004, I walked across an assembled stage at my alma mater, Eastern Illinois University, to receive an empty folder from a man I had never met and it was assumed (obviously by me) that it would unlock all the doors I had hoped to unlock in life. I was relieved that I had finally made it because I mistakenly thought that I was going out to conquer the “real world”. Fourteen years later and five jobs under my belt, I realize that you never stop learning and that school had very little to do with this “real world”. Most jobs either are not at the technological level we learned in school or don’t fit into the perfect world scenarios envisioned by the books, but I digress… My favorite teachers in school were the ones that were also doing what they taught in their own businesses. They were very quick to call out the writers when the books were delving into what you could politely say was a fictional scenario.
Enter Anirban Basu at the recent World of Modular conference in Las Vegas. He is an economist who is self-aware enough to know that he is not in the most entertaining of fields. I had been told before the speech that he was going to be good, so I knew I was probably going to like him. All doubt left when the title for his speech and picture referenced the 1984 crossover hit, “To All the Girls I’ve Loved Before”, and used economics to show that there is nothing new under the sun.
He started with this quote by Janet Yellen: “There is always some chance of recession in any year, but the evidence suggests that expansions don’t die of old age. ” In other words, it’s true that economists are always shouting economic slowdown during a boom period, but no expansion has lasted forever. He pointed to the Baltic Dry Index, which he asserts is a solid predictor of an economic downturn. He brought up a chart on the global economic growth highlighting the softening markets overseas that are buying and selling to us. He discussed the Capacity Utilization Rate, which also predicts when an economic downturn is imminent. Not that they say we’re in a recession; more likely, it’s a “correction” from the white-hot economy we’ve had over the last few years.
One cool point he made was about the inequality of the jobs available to workers. He said that one major reason is males 21 to 34 are not entering the workforce to instead, stay home to play video games. Now I admit I indulge in a couple hour-long gaming sessions periodically, but I also have had a job since I was 10 when I first started mowing lawns and currently work over 40 hours a week at PME. But a major segment of our society has chosen to remain jobless or as they say, “in transition” for 15 years? You can check out this cool article about it here.
But in every rain cloud, there is a silver lining, or as Basu intimated, in every economist’s speech, there are hopeful statements so they will invite you back next year. The number one issue was the China trade deal, which is what took me back to school. I had an economics professor that talked about this China trade deal back in college. His big “wag of the finger” was a study he did on all the trade ambassadors to Japan and China, refusing to put any teeth in their negotiations going back to Nixon’s term and then after their ambassadorship, wind up with a “consultant” position for one of their companies. Obviously we aren’t going to compete with them in manufacturing, but agriculturally, we can provide grain, beef, etc. for much less. Also, he talked about the Federal Reserve keeping the prime rate low and he’s not the only one saying this.
It’s nice to find out that your education taught you something that is getting a lot of attention in the current market. It makes all those thousands spent seem like they may have meant something. It’s also great that maturity apparently came in those 14 years as I was awake during HIS WHOLE SPEECH! On a personal level, I think we can all realize that every boom comes with a bust and how important it is to make smart economic decisions like using a modular elevator to open your project faster and get in on the good economy while it lasts. If you want to learn how you can save time on your project, email me for a quote at firstname.lastname@example.org. I can get out most budget numbers in under 24 hours.