While the rest of the Minnesota blogosphere was watching the MN House Transportation debate in either gleeful fascination (tax consumers) or horror (tax producers), I was hunkered down with a presentation to do last night at the Kelly Inn for the Economic Education Winter Institute's Economic Outlook. It's the 12th year we've done it, the fourth for me. The local newspaper report leads with my remarks. I notice at the time of this writing that the article drew over 200 comments. I don't have time to read them -- I'll explain more in a minute. But state economist Tom Stinson was also on the panel, and the paper's reports of his remarks bear noting:

Some of the big factors that are causing the decline are in the housing industry and the credit market, Stinson said.

New housing starts have been the lowest since World War II and have declined 25 percent during the last year.

"We're not making a dent in the (housing) inventory," Stinson said. "We have an 11-month inventory, we would like to have a four-month inventory."

Senior loan officers also are tightening standards of all types of credit in the commercial and home markets, Stinson said.

The state's diversified economy hasn't allowed it to become recession-proof, he said.

"Minnesota is going to have another slow year," Stinson said.

While his and my definition of slow might be different, notice that he DID use the word "slow". Slow could mean slow growth. As I said last night, the growth rate of jobs in Minnesota has to expand enough to absorb new workers. Tom Gillaspy, the state demographer, reminded the audience that this is the year the first of the Baby Boom generation turns 62. It's therefore not clear whether this will slow expansion of the labor force. This and 2009 represent also the last of the boomlet of students graduating high school. Nonetheless, it can easily turn out that Minnesota grows at a very sluggish rate rather than slumps (declining state GDP), and this would lower revenues somewhat below forecast as well as see a rise in unemployment. I don't think Stinson rules that possibility out, and after reading that I conclude his and my forecasts are closer together than I had previously thought. (I'm probably still a little more optimistic than Tom, but that's a pretty normal state of affairs.) We'll have to wait for the forecast on Thursday for more precise figures, but that's my read of what he was saying.

While I would have liked to have stuck around more last night and then discussed the transportation transit tax bill today, I went to my secret life today. I am confessing to being a basketball junkie, particularly when it is Littlest at play. Her school plays in a tournament in New Ulm each February, and this is her last year in the school so our last tournament. I suppose I could have had someone drive her down but I would not miss this for the world. Watching 10-14 year olds from very small schools -- hers has less than thirty students for K-8 -- play co-ed is pretty neat. Watching your Littlest chug up and down the floor with a huge smile on her face, one that does not vary if her team is up 10 or down 20, and seeing it on all the other kids too, is a world I will miss escaping into as she heads to high school next year. She will try to continue playing for her next school -- she can score and she's a ferocious defender, though probably has to move from point guard now -- but I don't think HS will be the same. We were within two with two minutes to go but lost by six today and out of the championship. Momentary sadness, then the kids realized they were here for the rest of the day to play around and have another game tomorrow, and the usual frantic buzzing of tweens and teens resumed.

Janet is kind enough to sit in for me tomorrow on Final Word, and I will not hear the show as her next game -- the last they will play here -- is at 3:15 for a consolation prize. If they win there'll be a small trophy, but regardless there'll be pictures and memories. And for a weekend, not a care about the soft economy or your silly transit ripoff.

I've just been called to pizza.

Labels: blogging, economics, legislature, Minnesota