Brian Beaulieu and Gatorsports.com
Economist Gives SFC Audience Tips on Succeeding in This Economy
By Anthony Clark
Published: Thursday, October 6, 2011
Economist Brian Beaulieu predicts that the global economy will go into recession twice more before the decade is over but said there are still opportunities for businesses to grow by investing in recession-proof industries, growing states and nations, and by borrowing at today's low interest rates.
Beaulieu spoke Thursday at the Santa Fe College Fine Arts Hall in a speech hosted by the Gainesville Area Chamber of Commerce, and he used a mix of analysis, advice and humor to get his points across.
Beaulieu is CEO of the Institute for Trend Research, an economic consulting firm based in New Hampshire, where he has been since 1982 after working at the U.S. Department of Labor. He also is chief economist for Vistage International and TEC.
While talking Thursday about investing in health care, he recommended eye care and bladder care, saying, "My research shows that when people can't see where they're peeing, they'll spend anything to make it better."
The institute subscribes to the Austrian school of economics, which believes an economy left to its own devices will grow.
"There is more collective wisdom in this room today than exists in all of Congress," he said to the more than 100 businesspeople in attendance. "The question is not what will make our economy grow. The question is what are going to be the inhibitors."
Based on leading economic indicators, he said he expects the economy to grow through 2013 before dipping into mild recession in 2014 followed by three years of growth.
The indicators include the availability of private equity, slowly rising employment and a normal rise in retail sales.
A deeper recession will follow in 2018-19 if nothing is done about the U.S. deficit, he said.
President Obama's $447 billion stimulus proposal is a good program for creating jobs, he said.
"The problem is paying for it," he said. "But if all you want to do is stimulate the economy into an election cycle … it's a good program."
Beaulieu also is predicting another Great Depression in the 2030s as a result of demographics and "an inability to cure the ills of Social Security and Medicare."
Since short-term interest rates are "extremely low," he advised to get over fears of the past and "go out and borrow as much as you can" to expand businesses and buy real estate such as rental properties "because the trend is more people are going to be renting than buying a home."
"You have to have money, which is why the rich are going to get richer," he said. "More than money, you have to have guts."
Beaulieu said businesses should develop customers in markets that are counter-cyclical to downturns, such as energy, green, water, Canada exports, higher education, food, pets, funeral services, alcohol, personal and national security, health care, and professional services such as legal and accounting.
States that are forecast to have net migration growth are good bets for business expansion, led by Texas, North Carolina, Arizona, Georgia, Florida, Washington and South Carolina, he said.
Avoid New York, Michigan, Ohio and Idaho, which are losing people, he said.
Globally, population growth will be highest in the U.S., India, Indonesia, Australia, Mexico and Brazil, while China, Europe, Japan and Russia are expected to lose population.
He ended by saying that fears of China becoming the largest economy are unfounded. The U.S. economy makes up 23.3 percent of the world gross domestic product, compared with 9.3 percent for China, while the U.S. has 5 percent of the world population.
"Five percent gets to enjoy 23.3 percent of the economy," he said. "At ITR, that's what we call a blessing."
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You were, as I planned and hoped, the highlight of the event. Even the most sophisticated amongst our guests and staff had not had the benefit of such a thought-provoking and enlightening presentation. If you ever need a reference (which I doubt you will), I would be honored to supply one.