Economist Christopher Thornberg rejects suggestion of economic doom in Sonoma County forecast

Economist Christopher Thornberg relishes playing the contrarian, and Friday in Santa Rosa he brushed aside the national rhetoric of pending economic doom as well as the suggestion that legalizing marijuana would do big things for the Sonoma County economy.

Thornberg, an annual speaker for the county’s economic outlook breakfast, summed up the current election season with a single invented word: “Miserablism.” He defined the term as a philosophy of pessimism that seeks to paint a gloomy picture in contradiction to reality.

“We are in one of the biggest bouts of miserablism that I’ve ever seen,” he told an audience of over 400 gathered in the main banquet room of the Hyatt Vineyard Creek hotel.

Thornberg, a founding partner of Beacon Economics in Los Angeles, painted a mostly upbeat outlook for the county and the nation. As such, he disputed much of what the two major presidential candidates have said about the economy, income inequality and the loss of jobs from free trade.

He also chided both contenders for staying mostly silent on what he considers a key national issue - the changes needed in the coming decades to make Medicare and Social Security sustainable as the massive baby boom generation grows old.

For Sonoma County, he predicted continued economic growth of 2-3 percent over the next two years, though he warned a lack of housing eventually will limit job growth and force out poorer people.

And to an audience question, he expressed doubt that marijuana would have a strong economic impact here, a suggestion made by some who contend the county could become “the new Amsterdam,” a mecca for cannabis.

In case folks haven’t noticed, Thornberg said, there has been “a lot of weed floating around the state for a long time.”

He pointed to Colorado, where he said illegal marijuana once sold for $9,000 a pound but the price dropped to $1,800 a pound after the drug was legalized for recreational use. Already, he said, the price in California has dropped to about $2,800 a pound because “there’s so much stuff” being planted in expectation of the outcome of a November state ballot measure that would legalize the substance here for recreation use.

And for local officials hoping to see the rise of a major marijuana sector, he cautioned that “every other county is thinking the same thing.” Even though supply will increase, he maintained that demand would prove “pretty inelastic” and marijuana won’t be like wine, with connoisseurs planning to buy “six cases of my favorite weed and store it in my cellar for 10 years.”

Thornberg, who gained a reputation a decade ago after correctly warning of a national housing bubble, expressed opposition Friday to a wide range of current and proposed policies, including the state’s new minimum wage law, rent control, trade protectionism and current home lending rules he said are shutting out households who lack a strong credit score of 720 or above. His opposition, he said, is based on the failure of such policies to obtain stated goals.

One policy he supports is expanding preschool, saying that it raises by roughly 80 percent a low-income child’s chances of graduating high school and going to college.

For the county, he suggested its two major challenges are to improve road systems, especially Highway 101, and to build more housing.

Over the past 20 years, payroll employment grew 40 percent in the southern Central Valley, a place of home building, compared to 24 percent in the Bay Area.

He maintained the Bay Area’s tech boom has forced an exodus from the region of lower-income workers. He later said the county’s non-wine farm sector could experience even more hiring troubles if farmworkers can’t afford to live here.

“If you want to grow,” he told the audience, “you’ve got to have houses.”

You can reach Staff Writer Robert Digitale at 707-521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit