Lexington, KY - I'm going to talk about which indicators we should be looking at for recovery," said Richard Yamarone, vice president and director of economic research at Argus Research Company and keynote speaker for the 2009 Bluegrass Business Summit at the Lexington Center on March 26. "I boil it down to grassroots, the street-level," he said. "I think one of the most alarming things that people hear is that some guy from Wall Street in New York is coming down and he's going to tell us about the whole world, but then they hear my presentation and realize, 'wow, he's one of us."
Curious about the dynamics involved in building a presentation around such a moving target as the current economy, Business Lexington, a co-sponsor of the event along with NetGain Technologies and InsightBusiness, put in a call to Yamarone and caught up with him between planes at the Atlanta airport.
But before getting into his thoughts, we turned for background on Yamarone to the Argus Web site. "Mr. Yamarone," it explains, "has more than 15 years of experience on Wall Street analyzing and researching domestic and international economic trends, interviewing Federal Reserve officials and monitoring fiscal policy developments. He has worked for major media companies, international banks, and domestic money center and investment banks. He is the former president of the prestigious Downtown Economists Club of New York City, and frequently appears on television, radio and in numerous U.S. and international newspapers and magazines." A member of Argus Research's Investment Policy Committee, Yamarone generates all of the organization's economic, interest rate and Fed policy forecasts.
"Small businesses are going to be the first to identify the recovery - they're going to know that before anybody else," he said.
How, in this economic climate, with all of its complexities and daily shocks and outrages, is it possible to forecast with some certainty what conditions can be expected to greet us in the near future? "It's going to be dismal," he said, quickly adding, "Please don't shoot the messenger! It shouldn't be surprising to anyone that we didn't have any government response until a couple of weeks ago. The government hadn't done anything to stop job loss or to create incentives for businesses to go out and hire."
Yamarone singled out Bush administration officials for claiming to have known that the U.S economy had been in recession for the last year-and-a-half, but doing nothing about it.
As for the Obama stimulus package recently passed by Congress, "There's a lot of spending, with the bulk of it not coming until next year, so that doesn't do anything for us now. A lot of it is just spending, but we really don't yet know on what. In the meantime, you have to provide incentives for somebody to get into the extremely costly measures of taking on new workers. You have to pay those medical costs which are going through the roof; you would almost have to be a crazy person to hire in this environment."
A key element of the new administration's economic rescue effort was extended and expanded jobless benefits and food stamp programs. "I'm not saying those are bad programs," Yamarone said, "but you've got a boatload of people who are unemployed who you have to make sure you're taking care of. But, that doesn't create jobs. That's just a life-preserver tossed to someone who's already in the water, and it doesn't stop others from falling into the water with them. That's one of the problems I have."
Beyond singling out past and present administrations, Yamarone reserved some scorn for the denizens of Capitol Hill. "Whatever happened to Congress? This is what our elected officials are supposed to be doing." Which brought him around to a subject he professed to find uncomfortable. "I hate doing the political thing. It's something I don't do." That said, "But, I don't believe this is President Obama's stimulus package. I think that this is (House Speaker) Nancy Pelosi's stimulus plan. This is something she's wanted for a long while; that the Democratic team wants. Unfortunately, it's not the right prescription for the country's current ills."
Yamarone predicted a need for yet another stimulus plan in the near future. "It's going to be a more 'boots-to-the-ground' job creation program; more people with axes and hoes and sledge hammers."
Quoted extensively in publications including The Financial Times, the Wall Street Journal, BusinessWeek, and the New York Times, Richard Yamarone is currently pursuing his Ph.D. in economics at the New School for Social Research in New York City.
Panels during the morning session of the Business Summit will focus on local banking, and the experiences being encountered by local entrepreneurs.
More information is available online at www.bluegrassbusinesssummit.com.