By B.C. Manion
The presidential election in November – regardless of the outcome – is unlikely to spur a rapid recovery of the economy, Scott Brown, chief economist for Raymond James said at a luncheon Friday in San Antonio.
“This is an election year and you’re going to hear an awful lot of noise about the economy,” Brown said. “At Raymond James, we try to take a neutral stance.”
He told those gathered at the Tampa Bay Golf & Country Club that it takes more than the president to accomplish real change. Roughly 200 political and business leaders registered for the luncheon sponsored by Saint Leo University and hosted by the Pasco Economic Development Council.
“The president gets all of the credit or all of the blame for whatever happens in the economy. I would say the real key element in the election is the Senate.
“With the Senate, you need a 60-seat majority to get anything done. The other party can just put up a roadblock,” Brown said.
He characterized the recent debacle over the nation’s debt ceiling as “a complete manufactured crisis.”
“It became a political football. ‘We’re going to hold our breath and turn blue until we get what we want,’ ” Brown said, describing the behavior of some members of Congress.
“There’s plenty of room for compromise, but we’ve seen the acrimony between the two parties.
“Any idiot would tell you that if you wanted to balance the budget — why you raise taxes and you cut spending,” Brown said.
But that doesn’t work in Washington.
“You’ve got one party who does not want a single dime cut in taxes,” Brown said. “And the other party which doesn’t want a single dime cut in entitlements, in Social Security and Medicare.
“Something’s got to give.”
During the $25-a-plate luncheon, Brown outlined the issues leading to the nation’s economic downturn and predicted the recovery will be gradual.
“Bank lending to consumers and businesses is getting better. I think that will continue to improve over the course of the year,” he said.
Foreclosures have slowed, too, but a full housing recovery will take some time, especially in Florida and other hard-hit areas, he said. About 50 percent of Tampa Bay homeowners owe more on their houses than they’re worth, he said. He expects most people will continue paying their mortgage, although that becomes a problem in the event of job loss, illness or divorce, he noted.
On the bright side, “this is a great time to buy a house,” Brown said.
In the employment arena, there have been gains, but not enough to lift the economy, Brown said. He expects more hiring, but again, not a huge improvement in the short-term.
“The last two years has been a story of not a lot of job destruction, but not much job creation and that’s sort of key. We’re not recouping the ground that was lost in the downturn. We still have a very, very long way to go, in terms of a full recovery in the labor market.”
