Economists: U.S. economy getting better, but a Romney White House may speed things up - East Valley Tribune: Ahwatukee Foothills

Economists: U.S. economy getting better, but a Romney White House may speed things up

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Posted: Saturday, May 19, 2012 2:17 pm | Updated: 1:42 pm, Wed Oct 10, 2012.

Three university economists predicted Tuesday the state and national picture will brighten pretty much no matter what happens at the polls in November.

But two of them think that ousting Barack Obama from the White House may hasten the recovery.

The assessments came from staffers at the W.P. Carey School of Business at Arizona State University ahead of the annual outlook luncheon sponsored by the Economic Club of Phoenix.

Robert Mittelstaedt, dean of the business school, said the economy is being bolstered by improved consumer confidence. That, in turn, means people spending more money.

He and the other economists said that trend will continue absent a major shock to the economy. But Mittelstaedt said he believes Romney will be better for the economy.

“That simply has to do with, I believe, more willingness to manage the entitlement side of the federal expenditure and to get some control of the debt,” he said. “Those are the things I believe we need to worry about right now.”

Professor Lee McPheters pointed to the sharp improvement in job growth in Arizona.

In 2010, he said, the state was 49th in the rate of job growth for the whole nation.

“Last year for the whole year we ended up in the mid-20s,” McPheters continued. “And the latest numbers we have for March rank Arizona No. 8,” with Arizona adding 47,000 new jobs in the past 12 months.

On a national level, there have been 3.5 million jobs created recently. But McPheters pointed out that leaves the U.S. with the same number of people working now as it did when Obama took office.

“So you can have it both ways,” he said. “You can say we’ve added 3.5 million jobs or you can say, looking at the inauguration date, we’ve made no progress whatsoever.”

That, McPheters said, affects how people see the economy — and their habits.

“I think that the benefit that would be associated with a change in administration is simply a shock to the system, that, hey, we’re starting over,” he said.

But Dennis Hoffman, another ASU professor, disagreed.

“I’m really quite optimistic about the economy, regardless of who sits in that office,” he said.

“I don’t think it matters dramatically,” Hoffman continued. “I can think of mattering around the edges.”

That still leaves potential caution signs, including the size of the national debt. Mittelstaedt said failing to deal with that could result in the United States ending up with the same problems as several European economies.

And he said a global recession would drag down the U.S. economy.

But one thing that does not worry Mittelstaedt is the price of gasoline — and not just because prices have backed off recently from the $4 a gallon range. He said while such numbers were considered outrageous only a few years ago, they no longer shock consumers.

“We all get sensitized to something over a period of time,” he said.

“Initially you say, ‘I’m going to quit driving,” Mittelstaedt continued. But he said those vows seldom last long. Instead, motorists respond by buying smaller, more fuel-efficient cars and driving a bit less.

In essence, he said, people have adjusted to the “new normal.”

One area where there has been significant recovery has been in home values.

Michael Orr, who heads the ASU business school’s Center for Real Estate Theory and Practice, said it is getting harder and harder to find a bargain on homes under $200,000. He said prices are now up 20 to 25 percent above where they were when they hit bottom, though they still are 40 percent below their peak.

Orr said, though, anyone who bought a home before the real estate bubble burst probably has “a really long time” to wait before the property is worth what was paid.

“People who bought in that period are obviously going to be under water for a very long time,” he said.

Orr said, though, that anyone who purchased a home in the 2003-2004 range is probably once again in positive territory. Similarly, he said those who bought after the market went bust also should be sitting pretty.

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