Puget Sound region fared well during Recession, but let's not be smug
If another lost decade is ahead, just holding onto our key companies and sectors will be a bit of a victory. This includes manufacturing, unsexy though it may be, which provides more added value, export heft and well-paid jobs than most service sectors.
Special to The Seattle Times
It was the decade of "black swans," those breathtaking surprises that confound most expert predictions. It was a lost decade, for most wage-earners and average investors in the market, as well as for many house owners. Through it all, Seattle fared surprisingly well, the rest of the Northwest somewhat less so.
I attribute it to the Puget Sound region's good bones: an abundance of talent, a foundation of wealth and stewardship and a diverse economy that disproportionately creates high-wage jobs. It allows Seattle and the metropolitan area to punch well above its weight class by a variety of economic measures aside from the increasingly arbitrary whims of the Wall Street casino.
Yet no small amount of luck was involved, too. What if Sept. 11 had been far worse, delivering a permanent blow to airlines and Boeing? What if a Gore administration had gone after Microsoft as its predecessors did the old AT&T, or Amazon.com had moved to cheap office space in suburban Texas? Or the Nisqually tremor had been the kind of super quake that now worries scientists?
The point is: Don't be smug.
The next decade promises more black swans. If I knew what they were, I wouldn't need this column gig. But discontinuity and instability are everywhere, from questions surrounding the sustainability of the recovery and the long slog ahead to replace lost jobs to our more expensive energy future. The competition and consolidation we saw in the 2000s — which denuded the Midwest and consigned many cities to branch-office status — will only get more intense.
Boeing foreshadowed one potential bad future with its opening of a 787 assembly in South Carolina. Another comes from Microsoft being overtaken by Apple in market capitalization, the back beat being questions about the software giant's innovative power. Northwest ports face serious threats from changes to shipping lanes and the Canadian competitor at Prince Rupert.
China and India are fielding formidable competition to the region's software prowess.
In Oregon, for all of Portland's enviable transit and livability, the semiconductor industry is always at risk from a slow trickle of jobs and investment to Asia while the state faces a long climb out of a serious recession.
Barring an astonishing comeback — talk about a black swan — the U.S. economy will, at best, grow slowly for years. America is poorer after the Great Recession and heavily in debt. That leaves the Northwest competing in a nasty zero-sum game. Seattle's best coup lately has been luring Russell Investments — from Tacoma. Don't think other places around the country aren't licking their chops over our outsized assets. Ask North Charleston, S.C.
The capital markets are more unmoored from productive economic activity than ever. This puts a premium on the "destruction" part of creative destruction, in the form of jobs-killing mergers and disincentives to building companies for the long term. Seattle hasn't seen a new homegrown corporate powerhouse like Microsoft, Starbucks or Amazon.com lately, and that should be cause for concern.
So if another lost decade is ahead, just holding onto our key companies and sectors will be a bit of a victory. This includes manufacturing, unsexy though it may be, which provides more added value, export heft and well-paid jobs than most service sectors.
But the decade won't be lost everywhere. And real success may rest with Seattle and the Northwest forging ever-closer economic links with Asia. Much of the rest of America is in for a very rough road.
You may reach Jon Talton at email@example.com
About Sound Economy
Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest
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