America is in a recession, but increased education, new industries, and a healthy dose of optimism will steer the country back on track and into a bright future, according to economist Jeff Thredgold.
"Despite the problems and challenges we face, America remains the greatest country in the world," Thredgold told an audience at Carson Valley Inn on Wednesday morning.
The Northern Nevada Development Authority, the Business Council of Douglas County, and the Carson Valley Chamber of Commerce hosted the event, and Nevada State Bank sponsored Thredgold's appearance.
Thredgold, who recently published "econAmerica," said that the housing market could stabilize by the middle of 2009, precipitating a wider economic rebound.
"It's a mess. It's a painful process, but we will get out of it," he said. "In 10 years, we will be dealing with something different."
Thredgold said education will be the driving force of the future economy.
"The economy demands and rewards education more than ever before," he said.
He said young people used to have two options, going straight into the workforce from high school or going to a traditional college; but now they have a third option: technological/vocational education.
"Even on an assembly line, workers have to run computers and know robotics," he said. "Now at American colleges, one out of three students is 40 or older. The mix is changing in a dramatic way."
Thredgold said tightening labor markets will increase the value of American workers.
"A limited supply of new workers will increase the value of existing workers," he said. "Workers will be paid better and receive better benefits."
Thredgold listed seven critical industries of the future: Technology, transportation, telecommunication, financial services, energy, entertainment and biomedicine.
"Three of them are guaranteed growth, compliments of 78 million baby boomers " health care, financial planning and leisure/entertainment," he said.
He said he expects low interest rates and low inflation in the coming months. He said inflation will be checked by smarter consumers and competition among businesses.
"It's not a matter of raising prices," he said. "It's a matter of defending current prices."
He also said the Internet will become increasingly more important in the global economy.
"In 1992, there were about five public Web sites. Now, there are 65,000 new Web sites every 30 seconds," he said. "Global companies can save $1.25 trillion in operating costs by using the Internet."
Thredgold said he is determined to stay realistically optimistic in the face of so much pessimism. He blamed the media for marshaling negativity.
"I'm waiting for the headline that says, 'What a good time to buy a house,'" he said.
Thredgold was optimistic about the $700 billion bailout recently passed by Congress.
"It's not going down a rat hole," he said. "It will be used to stabilize the markets. It will come back to the taxpayer."
Thredgold said he believes in the American free-market system, despite some painful setbacks.
"Four words define the economy: People respond to incentives," he said.
Tim Rubald, a consultant for the Northern Nevada Development Authority, was also optimistic.
"We are definitely living in exciting times," he said. "The NNDA has been busier the last three months than any other time I can remember, and I have been involved with them for 10 years."
Rubald said the organization is currently working on about 40 prospects, businesses looking at moving into Northern Nevada or existing businesses seeking expansion.
"They are looking to invest," he said. "Even with the economy down, there is opportunity to start business and to expand."