Goldilocks is home

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LOREN BENOIT/Press John Mitchell gives a presentation on economic incentives, restraints and what may be on the horizon after the new year to Coeur d’Alene Chamber of Commerce members on Tuesday morning at the Best Western Plus Coeur d’Alene Inn.

By BRIAN WALKER

Hagadone News Network

COEUR d'ALENE — Economist John Mitchell tapped into movies to help deliver his cautiously optimistic forecast to business leaders on Tuesday.

Mitchell said most economic indicators point toward the upturn, now in its 101st month, continuing to roll in 2018 — but there's just enough uncertainty that we shouldn't become too comfy.

He alluded to the movie "As Good as it Gets" and the theme song of "Top Gun" called "Danger Zone" while summarizing his talk entitled, "Old, Polarized and Exciting" to more than 150 Coeur d'Alene Chamber of Commerce members at the Best Western Plus Coeur d'Alene Inn.

"Maybe this is as good as it gets," said Mitchell, a former Boise State University economics professor and now a consultant who lives in Coeur d'Alene.

"You can't help but think if we are in a danger zone. We've had low interest rates, tight labor markets and near full employment. Will we be able to maintain Goldilocks?"

Even with those words of caution, Mitchell said he still feels positive about where the economy has been — and where it’s heading.

"We haven't been here (with such a long upswing) too many times before," he said, adding that we'll pass the uptick of the 1960s in a few months and should close in on the 120-month record of the 1990s.

"The U.S. economy has continued to grow since the middle of 2009."

Closer to home, the economy is also sizzling. Kootenai County's median household income in 2016 was $57,657, up 3.3 percent over the previous year. The county's population increased 11.1 percent (15,424) from 2010 to 2016.

Mitchell said our low cost of business and proximity to high-cost areas like Seattle that can entice companies to relocate bode well for our area. Kootenai County will continue to be an aging population destination, he said. Confidence nationally in a robust region also implies there will be strong travel and tourist activity.

What also gives Mitchell optimism for continued growth into 2018 is that the current economy differs from previous upswings.

"Watch the stories," he said. "In '05, it was put nothing down and buy a house. That was the accepted behavior — with serious results. If the stories result in weaker spending, that could be the onset of the next recession, but that doesn't seem to be the case now."

What could rattle the economy, he said, is if there are major shocks — like oil developments or political crises — should President Donald Trump's expansionary or tax policies become reality.

Len Crosby, a chamber member who has heard Mitchell's forecasts for several years, said he believes this was the economist's most upbeat forecast in recent memory.

"In our region there are so many positive signs — low cost of living and high quality of life — that I've come away optimistic," he said.

Crosby said he has known Mitchell to be a straight shooter with the data and not sugar-coat his outlooks.

"When we headed into the downturn, he was pessimistic and realistic," Crosby said.

One sleeping giant that hasn't had much discussion and will need to be addressed is the continued expansion of entitlements such as food stamps and other assistance programs, Mitchell said.

That trend translates into putting a squeeze on other federal departments, like education and defense.

"I bought the book 'High Cost of Good Intentions' and couldn't put it down," he said. "Fifty-five percent of American households receive cash or in-kind benefits.

"This is a long-term problem we're going to have to deal with, but we're not thinking about it much now. It's going to take real leadership (to address the situation)."

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