Sonoma County's economy will keep growing, the new Rohnert Park casino will give the region an economic boost and median home prices in the region will see double-digit growth next year, economist Christopher Thornberg predicted Friday.
Once tagged "Dr. Doom" for correctly forecasting the collapse of California's housing bubble, Thornberg gave a mostly upbeat forecast to 450 business leaders at an annual breakfast sponsored by the county Economic Development Board.
Many economic indicators are as strong as at any time since he started speaking in Sonoma County nine years ago, said Thornberg, formerly a senior economist with the UCLA Anderson School of Management.
Using several dozen charts, he pointed to improvements in such areas as household debt, job creation, corporate profits and the stock market.
"We're dealing with an economy that is clearly moving forward," said Thornberg, founding partner of Beacon Economics in Los Angeles.
His biggest concern remains elected leaders in Washington. Partisans in both parties have created tremendous uncertainty, he said, which explains why companies are failing to make large investments that would benefit the economy.
What's needed, he argued, are ways to give voters the means to elect more centrist leaders. He said California has provided possible solutions by adopting its top two primary system and changing its redistricting process, no longer allowing state legislators to draw up their district boundaries.
Thornberg acknowledged that housing construction remains sluggish. He attributed that partly to fewer families being able to qualify for loans under new lending rules.
For the Golden State, he also blamed the lack of new housing on the California Environmental Quality Act, or CEQA. The act, which Thornberg called "the most abused law ever," needs to be reformed to allow a better balance between environmental protection and growth.
He disputed conservatives who think federal budget deficits are running too high and liberals who argue that the government needs to do more to boost consumer spending.
Consumers actually need to save more, he said, in part because Social Security and Medicare likely will require cuts in benefits in the long term. Younger workers should be setting aside more money to prepare for that day, he said.
Thornberg specializes in disputing what he sees as wrong-headed assumptions and doing it with the rapid-fire wit of a man with more ideas than time.
"This is not your grandma's casino," he said in response to an audience question about the Graton Resort & Casino, set to open next week. Visitors will come not only for the gaming but also for the bars, the shows and the dancing.
"It's going to make Sonoma an even better place to come," Thornberg said of the casino's impact on tourism. The business also is creating jobs for low-skilled workers, he said.
Asked about Obamacare, Thornberg said he supported requiring all people to have health insurance, even as all drivers must have auto insurance.
He acknowledged the federal health care law doesn't solve a key problem, namely that the nation pays 50 percent more for health care than other countries. But he suggested that future revisions could address that issue, adding that health care is too big and convoluted to rely solely on private market solutions.
<NO1><NO>Before Thornberg's talk, Economic Development Board Executive Director Ben Stone told the audience that the county's wine and tourism segments continued to perform well.