"We're not in crisis; we're getting back on our feet," economist Jim Glassman told a small gathering of business professionals Wednesday at an economic outlook luncheon sponsored by Chase, the Little Rock Regional Chamber and Arkansas Business.
Glassman is managing director and head economist for Chase Commercial Banking.
He spoke at the Capital Hotel in Little Rock about how layoff levels and the unemployment rate are low, and said job growth is strong. GDP growth is also on pace with layoff levels, Glassman said.
He also lamented the lack of policy discussions in this year's election cycle.
Glassman said that while the U.S. House of Representatives is likely to remain in Republican control, there's a possibility that the Senate will go to the Democrats. But whoever is elected president will not have data to support another stimulus package like what the nation saw during the Great Recession, he said.
Glassman said that while many people blame manufacturing job loss on globalization — a feeling Republican Presidential nominee Donald Trump taps into — innovation has been more disruptive.
For example, planes now have the technology to practically fly themselves, he said, and although there are still pilots, the value of those pilots is lessened. Glassman added that innovation also creates jobs that require workers with more skills.
But the economy is not as bad as it might seem to the general public, Glassman said.
He called the nation's recovery from the Great Recession "beyond normal," although he said history books would likely label it as a normal recovery. Glassman said the Federal Reserve should raise interest rates to avoid dislocations and back off from stimulus to avoid long-term dislocations and to balance the economy.
When the housing bubble burst in 2007, economists said recovery would take decades, and Glassman said his 10-year estimate was the among the most optimistic.
But he noted that, after only nine years, housing prices are back to what they were in the spring of 2007; unemployment has dropped from about 10 percent to around 5 percent; 2 million people in their 20s and 30s are returning to the job market after going to school when opportunities were scarce; and a record number of people, about 15 million, are employed.
The automobile industry is also back to normal, Glassman said, to the surprise of those in the industry. And although the country is in debt, its debt is not growing faster than the economy.
But one concern the next president must address is the rising cost of health care and the imbalance in entitlement programs like Social Security, he said.
Glassman said that for every $1 paid into Medicaid and Medicare, $3 is taken out — a reality that's difficult to talk about politically.