Tag Archives: economy

News, Transportation

Seattle Takes Light Rail Train to Job Growth

March 12, 2013 Michael van Baker

It’s a nationwide trend: As jobs return, so do public transit passengers. The American Public Transportation Association says a record 10.5 billion trips in 2012 would have closer to 10.6 except for the impact of Hurricane Sandy on all modes of public transit along the Eastern seaboard. The association attributes the “second highest annual ridership since 1957” to the cost of gas and an improving employment picture. (Thanks to the Slog, who alerted me to the study.)

Currently, the national average for a gallon of gas is $3.69 for regular, $4.01 for premium. (The highest recorded average was summer of 2008: $4.11 for regular.)

In a related Reuters story, APTA spotlights Seattle, “where transit rides rose 11.8 percent over the year as the metropolitan area added more than 30,000 jobs.” From January 2012 to January 2013, the state of Washington added some 65,800 jobs (98 percent of which were in the private sector), with the unemployment rate now holding steady at around 7.5 percent statewide, 6.3 percent in Seattle.

SIDEBAR: In fact, the state can’t quite believe the numbers are as good as the federal Bureau of Labor Statistics says: an increase of 24,100 jobs from December to January that may not be wholly new jobs, but may be due in part to seasonal adjustments and a change in the way the BLS reaches those figures. “Based on historical patterns,” explains chief labor economist Joe Elling, “Washington employment typically falls by 61,300 from December to January.” This year, the BLS estimated a loss of just 37,000, resulting in that “jobs increase” of 24,100. Elling expects these preliminary numbers to be revised to be more in line with an observed 5,000-jobs-per-month trend.

Nonetheless, Seattle is all over the APTA report on top transit ridership in the country during 2012. The Seattle Streetcar‘s ridership jumped five percent (750,294 boardings in 2012), with its First Hill line due to open in spring-summer of 2014 — and that line’s ridership is projected to exceed that of the South Lake Union stretch of rail. (There’s an ongoing fight to bring back the Waterfront Streetcar service, which used to carry several hundred thousand passengers a year as well.) Sounder commuter rail was up eleven percent (more than 2.8 million boardings in 2012), as was Central Link light rail (8.7 million boardings, up almost one million from 2011), reports Sound Transit.

King County Metro’s workhorse bus system carried 4.6 percent more passengers, as well — more than 115 million trips. Some of the boost in ridership can be credited to Viaduct Replacement Project construction and tolling on SR 520, says Metro chief Kevin Desmond, who has to fight for funding to maintain service levels, let alone deal with ridership increases. (Video of Desmond making his case available at Seattle Transit Blog.)

Funding for transit infrastructure is also up: “Last year 49 out of 62 transit-oriented state and local ballot initiatives passed,” said APTA President and CEO Michael Melaniphy, arguing this represented a sea change in public willingness to pay. The rise of transit dovetails with findings in a mid-2012 study, commissioned by the U.S. Conference of Mayors, that tied U.S. metro economies to transportation infrastructure. Have legislators understood this? Seattle Times columnist Jon Talton, whose article surfaced the report for me, wonders.

“If Seattle-Tacoma-Bellevue were a separate country — and many legislators in Olympia apparently believe this to be so — it would have the world’s 53rd largest economy, just behind Israel and ahead of Portugal and Chile,” Talton writes. That $242-billion economy (in 2011) placed Seattle twelfth out of 363 U.S. metros, behind Boston (9th) and San Francisco (8th). It’s in the neighborhood of those of the states of Missouri, Louisiana, or Connecticut. In the decade between 2001 and 2011, it grew an average of 4.4 percent each year.

Taken together with Olympia, the Seattle MSA accounts for more than 70 percent of Washington’s economic product, with about half of the state’s nearly seven million inhabitants. By 2042, the study authors expect the Seattle MSA to grow 40 percent, to nearly five million. By 2020, they anticipate another 285,000 jobs.

Interestingly, since 2000, Seattle’s congestion costs (figured by cost of gas and driver time) have actually fallen: to $942 per year in 2010 versus $1,102 per year a decade earlier. That puts the Seattle MSA in tenth place nationally, behind Boston (9th), Denver (8th), and San Francisco (7th).

Congestion also impacts freight tonnage, where Seattle is twelfth, ahead of Boston this time, but behind Minneapolis. Usually, exports represent between 15 and 16 percent of Seattle’s gross metropolitan product (that ratio changed during the recession, edging into the 20s as exports stayed strong).

“Investment in roads, rails, and other forms of transportation,” claim the authors, “will help relieve the bottlenecks impeding economic expansion,” though they also write that “road capacity has not kept up with passenger growth, and public and alternative transportation usage and development has not been substantial enough to pick up the slack.” They also envisioned the average price for a gallon of gas falling to $3.11 per gallon at the end of 2012 (remember it’s around $3.70 now).

Doesn’t it seem that, in metro areas particularly, public transportation would come first, with roads taking up the slack?

The demand for transit in Seattle seems an indicator that the current ratio of roads to transit is unappealing to metro voters. A $10-billion transportation package unveiled by the state’s House Democrats would spend the vast majority of that $10 billion on new road projects, with $1 billion for maintenance and even less than that for public transportation. It does not help fund the 520 floating bridge replacement, which remains more than a billion dollars short, or the SR 99 tunnel. It doesn’t sound like it has yet sunk in, as STB announces, “Transit Supporters are the Key Swing Vote.”

Arts & Entertainment, Dance

Reading “Turbulence,” Keith Hennessy’s Dance About the Economy

September 27, 2012 Michael van Baker

Emily Leap and Seattle guest artist Markeith Wiley in Turbulence at Velocity (Photo: Tim Summers)

Keith Hennessy's Turbulence at Velocity (Photo: Robbie Sweeney)

The human pyramid in Keith Hennessy's Turbulence at Velocity (Photo: Robbie Sweeney)

Keith Hennessy's Turbulence at Velocity becomes a dance party (Photo: MvB)

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Nothing in Turbulence, the largely improvised movement piece from Keith Hennessy and friends, confronts you with anything like that moment in Crotch (all the Joseph Beuys references…) when he has to sew bystanders (their clothing) to his skin with red thread.

But something else happened during the performance at Velocity Dance Center that was perturbing in its own right.

The “only nonimprovised piece in the show” is the building of a human pyramid, with the performers and volunteer audience members stripped down to underwear or nudity. They have hoods made of a shiny gold cloth on. Given that “Naomi Klein’s The Shock Doctrine” are the first five words in Hennessy’s program note, it would be difficult not to see a reference to Abu Ghraib here.

What kind of reference is wide open, but it was a shock to hear how gleefully the audience responded, cheering and encouraging the participants as knees and elbows wobbled, palms slid. Despite the hoods, despite the evident point being exhausted collapse, the audience (generally speaking) seemed to want to treat it as simply a cheer pyramid, a test of endurance. (Perhaps one or two guards did, too, it occurred to me. Remember when a few pundits compared it to hazing?)

There’s no “right” way to respond to a human pyramid, of course–but this was proof that Hennessy had succeeded, it seemed to me, in getting the audience involved as an improvisational partner. (In Portland, there was a Champagne slip ‘n’ slide that brought hipsters into a playground of excess. So, involved, or complicit.)

He told Culturebot: “People have to enter it poetically or that won’t happen. If they’re just waiting for the content to arrive it won’t happen.” (You get confirmation of that from this upset review, which includes the line, “I am very patient with these things!!”) He’s done what he can.

You wander in to something already happening, a “fake healing” involving dancers laying on hands, setting objects on top of audience members, manipulating their limbs. People are gently invited to join (I turned my person down because I wouldn’t be able to see what was going on), and it’s explained why it’s fake (“There’s nothing wrong with you”) and how it helps people open up a little to what’s going on, even if they’re just watching other people being open.

There’s no need to justify what Hennessy is up to, since getting out of that box is part of the project. (In fact the set is mainly splayed-open cardboard boxes.) Turbulence is supposed to (like the economy isn’t but does) fail. The other ur-text here is Judith Halberstam‘s Queer Art of Failure, which talks about refusing normative values and practices.

Hennessy queers dance, then, your expectations of it (or of performance art) and pursues what looks like a terrible idea, because how can dance be about the economy…and be good? (Coincidentally, you can go see another dance about the economy at Pacific Northwest Ballet, Cinderella. It’s about as normative and representational as things get, to the extent that nothing about the economics that creates penniless serving girls registers.)

Despite occasional outbursts, Hennessy and his troupe–Julie Phelps, Emily Leap, Laura Arrington, Jesse Hewit, Jorge Rodolfo De Hoyos, Hana Erdman, Gabriel Todd, Ruairí O’Donovan, Empress Jupiter, Jassem Hindi, with special Seattle guests Markeith Wiley and Joan Hanna–largely refuse the prospect of arguing with the economy. What happens is somatic, the experience of the body. There’s a scratched-up, staticky soundtrack, dj’d live, that is more about the feeling of the words than the content.

People pair up, or antagonize each other, or tangle furiously. If two dancers practice linking themselves, their weight counterpoised, a third will jump in. Throughout, the dancers swap clothing, stripping down and dressing back up. A trapeze set becomes the setting for blind, hooded, acrobatic feats–though the climb to the top is always greeted with the question of where to go from there.

Dancers move among the audience members, sometimes shouting out to those on the floor, sometimes having semi-private conversations. A gold sheet is produced, and passed over audience members like they’re playing under the covers. No one is likely to have the same experience: There are too many rings in this circus to attend to all of them. You can pay attention to the dancer screeching and masturbating, or you can look elsewhere.

For somatic poetry on economic collapse, though, it’s hard to beat when Hennessy, sitting on cardboard and talking about bitterness and anger, also reveals that the dancer sitting next to him has peed his underpants, and they’re all sitting in it. So much is contained in this: the stench of homelessness, animal fearfulness, the way this more ignoble (than blood) bodily fluid unites us, contaminates us. If you bother to think back to when thousands of people were losing their jobs weekly, you’ll smell the piss-stink again.

A quote attributed to feminist scholar Peggy Phelan pulls some of these strands together:

Love, despite its toxicity and violence, can bring us closer to the possibility of expressing human tenderness. If one is ambitious enough to want to create a shared history, then one must be willing to risk an impossible dance, one that pivots on a desire to outmuscle exhaustion, a desire alive to our wavering capacities to bestow and receive responses, and an apparently insatiable desire to question these capacities and what motivates and blocks them, repeatedly.

The ending is individual; once the improv list has been completed, you’re invited to stay, come down off the bleachers. Some people formed another human pyramid. Many more joined in a dance party that Hennessy decided to turn into super-slow-motion. A few stood around and talked. A conga line formed.

Turbulence may be meant to fail, but I don’t regret the time I was there, watching it refuse to amount to much, at least by some standards. It was a transient blip, in the greater scheme of things, but it created its own peculiar space while it existed. And if you think of healing in terms of wholeness, its ability to give you back the humanity in a human pyramid, the effervescence of an economic slide (both banished, we all had to pay somehow) is remarkable.

Business, News, Real Estate

Richard Florida’s “Seattle Boomtown” Source? Seattle Times Columnist Jon Talton

March 23, 2012 Michael van Baker

Since The SunBreak was founded, we have been telling you that Seattle Times columnist Jon Talton writes great stuff about the Puget Sound economy. (Partly we do this to keep him sane, beset as he is by Times comment-section trolls.) But today his work gets validation all the way across the country at Atlantic Cities, where Richard Florida quotes him in his post, “The Secret to Seattle’s Booming Downtown.”

But the area is in the midst of a true renaissance. As Jon Talton wrote earlier this week in the Seattle Times, downtown Seattle has not only recovered from its slump, it’s thriving. Amazon’s new headquarters could bring as many as 12,000 high-paid jobs to the area. The Bill and Melinda Gates foundation is opening a new campus. Even Boeing is leasing office space downtown.

Florida emailed Talton for more background, all featured in his Atlantic Cities post, but the upshot is this: “Today, Seattle provides a good example of the back-to-the-downtown trend that is reshaping cities across the United States as workers relocate to formerly neglected urban cores that offer transit, walkability, and central location.”

Florida, it’s safe to say, has a reputation for boosterism when it comes to promoting cities that appear to bolster his case for creative classification. But the signs are definitely pointing to a Seattle that’s poised to take advantage of post-Recession realities. As Geekwire noted recently, while the Washington State jobless rate’s dip, in February, to 8.2 percent was the lowest in three years, Seattle’s unemployment rate was even lower.

On Capitol Hill this week, a light-rail-tunnel-boring machine punched through on its trip from Montlake, leading CHS commenter oiseau to rhapsodize:

The area around Broadway Station is going to be the most convenient place to live in the entire city. A new subway station. A new tram stop. Two new rail lines. A wonderful cycle track. All of the amenities that we already have (restaurants, bars, grocery stores, pharmacies, etc etc etc) plus many more (permanent home for the famers’ market!).

Meanwhile, billionaire Paul Allen donated another $300 million toward brain science. In February, the state’s economic and revenue forecast council noted, “light motor vehicle (LMV) sales were one million units (SAAR) higher than January sales, coming in at 15.1 million units. This was the highest rate of sales since early 2008.”

jontalton — Jon Talton (Photo: Seattle Times)

Taken together, this does indeed sound like a recovery in progress. But, as Talton says, “Seattle has to keep the momentum going.” Two areas spring to my mind. One: the intersection of central waterfront planning and Seattle’s burgeoning cruise ship industry. “Disney’s decision to return to Vancouver next year is an economic loss for Seattle,” quoth the Seattle Times. Are we ready to talk about a higher-priced downtown cruise ship berth?

And, amid the excitement over light rail, there’s the news that King County Metro is gearing up to make a nearly-$240-million purchase of trolley buses. You don’t have to have much experience with Metro to suspect that the rider experience comes close to last in their calculations, a suspicion borne out by their response to my question about the new trolley bus interiors.

I emailed to inquire about “new interior features: e.g., configurable seating arrangements, cup holders, wifi, electronic displays, accessibility options, power outlets”–the kinds of things that Seattle’s new downtown residents might look for if transit is going to take the place of single occupancy vehicles. Randy Winders, Metro’s manager of vehicle maintenance, was kind of enough to respond, but the news was not heartening: “Exact interior amenities have not been determined. However, they will not have most of what is suggested [by your email].”

The notion that the insides of buses can be left to last has got to change. The inside, after all, is where the passengers are.

Business, News, Politics

Washington Federal’s Roy Whitehead on Banking, Public Trust, and Regulations

January 17, 2012 Michael van Baker 1 Comment

“We are the strongest bank in our market,” said Washington Federal Savings CEO Roy Whitehead to the Met Grill’s “Guess the Dow” panel last week. His complaint was that you wouldn’t know that from the stock market. As I wrote then:

This year’s featured speaker, CEO of Washington Federal, Roy Whitehead, gave a textbook illustration of pessimism’s fear to tread. With investors soured on the whole financial sector, Washington Federal’s holding company stock (WSFL) is trading below its tangible book value. That can’t last. At some point, investors will have to agree to have money thrust into their hands, even if it’s from a bank. (Literally. WaFed is paying eight-cents-per-share dividends.)

Whitehead’s point deserves underscoring because it illustrates reason for economic optimism. Investors may well be “once bitten, twice shy,” but investor psychology can turn on a dime, much faster than can institutions with serious structural weaknesses. Not that winning back trust will be–or should be–easy. “If I could wave a magic wand,” admitted Whitehead, “I would bring back Glass-Steagall–or something like it.” Differentiating the role of his bank from investment banks, he said, “We are stewards, not big-game hunters.”

About this time in 2008, people were estimating that some $7.7 trillion had been lost in the subprime mortgage crisis nationally. Bank of America chief market strategist Joseph Quinlan was quoted as saying, “It could take months or even years before Wall Street and others get a handle on the true cost of the U.S. subprime meltdown and the attendant global credit crunch.” A year later, Bank of America’s stock hit a low of $2.53. It’s now trading around $6.60 (BAC).

In contrast, there’s stolid, headline-shy Washington Federal, profitable every single year since 1965, outperforming the industry average regularly, claims Whitehead, in return on assets. (For clarity’s sake, Washington Federal, Inc., is the company that owns the bank known in eight states as Washington Federal Savings.) It’s instructive that “Savings” is the sole word retained from the bank’s original name–it was founded in 1917 as Ballard Savings & Loan. With more than $13.4 billion in assets, Washington Federal still mainly makes its money the old-fashioned way, by loaning out depositors’ money against fixed-rate mortgages, which it holds onto.

On the face of it, there’s no reason for Washington Federal to be affected by subprime contagion; they never offered anything but “pure vanilla” fixed-rate mortgages to applicants whose credit-worthiness they knew, and since they never tried to securitize those loans, their ownership of the note is unquestioned. Because the crisis developed into a national tide that sank all boats, Washington Federal did see more non-performing assets than usual, but charge-offs reached their quarterly peak of almost $60 million back in spring of 2010, subsiding to just over $10 million for Q4 of 2011.

Conversely, net income has grown from about $13 million in Q2 of 2010 to about $33 million last quarter. Everything, said Whitehead, pointing to his graphs and charts, is “going in right direction except for loan volume, which is an industry-wide problem.” It’s still a difficult climate for lending if you are prudent with depositors’ money. Rather than compromise on the quality of their mortgages, Washington Federal is supplementing those loans with an evolution, begun “six or seven years ago,” into more commercial lending: real estate loans, term loans and lines of credit, and other business-related financial services.

That’s also a response to the fact that, as Whitehead put it, “the mortgage industry has been nationalized. We have conceded the largest asset class in the world to the federal government.” One way or another, the U.S. government backs 97 percent of mortgages, and Whitehead, I think it’s fair to say, believes that is a driver behind changing social attitudes toward credit obligations. When lending is local, there’s a social obligation to repayment–as George Bailey famously explained, that’s your neighbors’ money at work. When it’s the federal government, people find it emotionally easier to just walk away.

And that’s just one of his industry-fed headaches, the list of which includes other banks’ embedded balance sheet issues, exposure to the European economic crisis, historically low interest rates, the capping of debit card transaction fees, and spiking FDIC insurance: “The premiums the company pays to the Federal Deposit Insurance Corp. (FDIC) skyrocketed to $22 million last year, up from $870,000 in 2008,” reports Sanjay Bhatt in the Seattle Times.

His bank was just named #1 of “10 Well-Run, Profitable Banks” by TheStreet.com (who list WaFed as a Buy, currently), and back in January 2011, one of “10 Western Bank Stocks for the Long Term.” Summing up his bank’s thriftiness, Whitehead said, “We spend 30 cents to make a dollar.” But regulations imposed for other banks’ risky behaviors are cutting into the competitive edge that efficiency gives Washington Federal. They pay the same skyrocketing FDIC rates as any other bank, they’re pressed to hold a larger percentage of assets as collateral, they’re asked to fill out forms in triplicate to triplicating agencies.

When the FDIC agrees to back $250,000 of your deposit, that agreement doesn’t come for free. The bank cedes some autonomy, and takes on not-insignificant back-end reporting costs. In place of the personal trust shown by a local lender, the government demands verification, and in place of accountability, it often seems by design to prefer a blizzard of paperwork, instead.

It doesn’t need to be this way, argues Whitehead. Banks “need to win the public back over,” and they can, by recognizing (again) that savings banks and investment banks are not the same thing. “Compensation practices need to change,” he said, adding that he has always resisted paying incentives that weren’t tied to overall bank performance. Because they can, Washington Federal is working with its customers on mortgage adjustments, depending on ability to pay. They’re offering temporary, interest-only payment plans and even forgiving principal in extreme cases, sharing the “haircut” on valuations with their clients.

It’s striking to hear a graduate of the Southwestern Graduate School of Banking at Southern Methodist University say–in response to a question about Occupy Wall Street–that “young people need to be rioting in Washington about the forfeiture of their future.” Give it time.

Business, News, Politics, Real Estate

Washington’s Unemployment Rate & Economic Outlook, October/November Edition

November 18, 2011 Michael van Baker

WAUI2011 — Washington State's Unemployment Rates through October 2011

Here’s a riddle for you. Washington State’s unemployment rate is tracked to the tenth of a percentage point (though whether the data supports that level of precision is arguable). It has “fallen” for seven out of ten months in 2011, yet in January the (preliminary) rate was 9.1 percent and in October it was 9.0. Is this a new instance of Zeno’s Paradox?

Most recently, it fell in the Seattle Times, Seattlepi.com, and Puget Sound Business Journal. (In fairness, “dipped slightly” in the Times.) Still, common sense tells you that somehow you are not getting the whole picture from the headlines. Nothing can fall that often, without going up, and yet remain within a tenth of percentage point of its beginning. The long-term picture is of an economy that, while not declining, is failing to gain ground in hiring.

I hesitate to call it a conspiracy so much as dogged optimism, but what you almost never read in the headline is “Revised Rate Adjusted Upward for Seventh Time”–I don’t actually recall that ever being in the headline, honestly, but to be on the safe side, I’ll add that “almost never.” But that’s how it works. The lagging revised rate corrects the preliminary rate upward, and then the succeeding month’s rate can be said to have “fallen,” even if, comparing preliminary rate to preliminary rate, you have exactly the same number, month to month.

This matters because on nights when Occupy Seattle blocks bridges with the aid of union members, as a protest against job losses, some fuming in their cars may be questioning whether things are that bad. Surely, after seven months of falling unemployment, things are getting better? And such complacency is best avoided, whether you think snarling commutes is ultimately helpful or not. So far this year, the state has lost 8,800 public sector jobs (5,400 being state workers).

In October alone, “Professional and business services lost an estimated 7,000 jobs over the month, more than any other sector. The transportation, warehousing and utilities sector lost an estimated 1,100 jobs and the retail sector lost an estimated 1,000 jobs,” says the ESD.

It’s not all gloom and doom. Delightfully, in fall, the state also sees a seasonal bump in what it calls “apple employment,” this year up 8.7 percent. And as the state’s chief economist Arun Raha notes in his November update to Washington’s revenue forecast:

We expect Washington’s economy to outperform the U.S. in the recovery. Boeing and Microsoft are both hiring again. The aerospace sector has added 9,100 jobs since May 2010, which is 3,100 more than the number lost during the recession, while the software sector has added 1,900 jobs since December 2009, making up for most of the 2,500 jobs lost during the recession. The state’s farming and export sectors are also doing well. Washington exports were up 29% in the third quarter of this year compared to the previous year.

Boeing’s commercial airplane division has just leased 45,000 square feet of space in downtown Seattle’s Russell Investments Center. These are the kinds of developments that have stanched the bleeding of job loss.

When Raha surveys the national scene, he sees this stagnant hiring situation writ large. You may be surprised to hear that the U.S.’s real gross domestic product is “back up to its pre-recession peak,” but that the nation has managed to do this with 6.8 million fewer jobs.

Growth in jobs has been excruciatingly slow in this recovery. The economy added just 80,000 net new jobs in October, although the previous two months were revised up a combined 102,000. Cutbacks in the public sector continue to weigh down the employment recovery with cuts of 24,000 across all levels of government. Almost 14 million people remained unemployed.

And cutbacks in government seem assured. In a good-news-bad-news sandwich, Raha announced that general fund revenue for the 2009-11 biennium should come to $28.2 billion, $25 million higher than previously estimated, but that his forecast for the 2011-13 biennium is $30.2 billion, $122 million lower. Meanwhile, Governor Gregoire has warned the Legislature to be prepared for a “brutal” November special session “that could include even deeper cuts to state education spending,” as KING TV reported.

Hiring in education was one of the bright spots in this year’s jobs reports. As the state looks to cut another $2 billion, that seems unlikely to repeat itself. (At current spending/revenue levels, the state faces a deficit of nearly $1.4 billion through 2013.)

At long last, we may need to break through the no-new-revenues deadlock. The budget policy group behind Budget Schmudget argues that cutting education spending threatens economic growth, and advises a new capital gains tax. At a Seattle Transit Blog meetup, WSDOT’s Paula Hammond said that the gas tax “has lost 49% of its purchasing power over the last ten years since the tax isn’t tied to inflation.”

Business, News, Politics

Washington State Economy’s Upside and Downside Risks Grow

September 20, 2011 Michael van Baker

6155401155_b96d291dd0_z — "We Buy Rugs" (Photo: Great_Beyond, in The SunBreak's Flickr pool)

“Seattle is as good as it gets!” Umpqua Bank CEO Ray Davis said this morning, at Umpqua’s Navigating 2012 economic forecast panel–referring to Seattle’s prospects of recovery compared to anywhere else in the region.

“Why does that frighten me?” responded an audience member, sotto voce. The Grand Hyatt conference room was packed with Puget Sound Business Journal readers who, if they sympathized with Ray Davis’s optimism, also have had their expectations tempered by the experiences of the past several years. Yet the takeaway was that while double-dip recession risks have risen, at the same time, so have recovery “risks,” due to the length of time people have cut back on spending. At some indefinable point, the dam is going to break.

Nothing that Arun Raha, chief economist for the state of Washington, said, though leavened as always with his wry humor, was particularly comforting. Noting that he had been predicting a U-shaped recovery, Raha said he’d learned a new letter: “L,” where the economy “muddled along” along the bottom for the foreseeable future.

“I’m very pessimistic,” he stated, with regard to signs that the economy might break out of the rut it is in over the next twelve months. Single-family housing remains “down in the dumps,” though rental demand has boosted multi-family housing investment. High unemployment is chronic, with Washington State in a 141,000-job hole. (There is slight good news in that 90-day notices of mortgage distress are higher than 30-day notices, indicating that the foreclosure pipeline is drying up.)

As the national economic indicators from the summer become firmer, they’ve been telling a more sobering story that doesn’t point to a hoped-for Q3 bounce-back. (Become an economist, Raha advised, because then you can go back and revise your numbers without going to jail.) Partly that’s because political shenanigans (including the “debt limit debacle–not the debate, the debacle”) have precluded the adoption of any sound fiscal policy.

Partly that’s because things are tough all over: World GDP is projected to be weak through 2012, and the Eurozone is facing its own crisis. Given the entangled state of the global economy, shocks elsewhere are likely to be felt here, and so Raha estimates a 30-percent risk of a double-dip recession.

That said, it’s also true that the longer the downturn persists, the stronger and more sudden the upturn should be when it comes. That’s the upside risk.

“We’re driving around in some of the oldest cars on record,” Raha mentioned, which is positively “Un-American.” (Since the recession, the U.S. has, I think, clearly entered the liquidity trap predicted by Paul Krugman in his book The Return of Depression-Era Economics; when everyone is cutting back on budgets, you enter a powerful negative-feedback cycle that’s hard to disrupt–the “rut” Raha spoke of.)

Still, things wear out. And whether it’s prudent or not, when your car wears out, you’re likely to need to replace it. When your socks develop air-conditioning, you buy a new pair. Surveying the scene, Raha sees a great deal of pent-up demand that is capable of flipping the economy into growth with surprising speed.

It may seem the least of anyone’s worries but economic consultant Bill Conerly underscored that there are upside–not just recessionary–risks, too: Can stripped-down businesses scale up fast enough to meet positive-feedback enhanced demand? In just six to eight months of recovery, Conerly predicted, many businesses could find themselves at capacity, and hard-pressed to keep up.

In this context, Davis’s call to “prepare for recovery” by investing now is not as self-serving as it sounds from a bank that would like to lend money through its six new commercial banking teams. (Since its expansion into Washington through a buyout of Vancouver’s Bank of Clark County, Seattle’s Evergreen Bank, and Tacoma’s Rainier Pacific Bank, Umpqua has become the largest independent community bank in the West, with 190 branches, and is now growing its international and business banking efforts.)

Davis is still exercised about FDIC regulations increasing the amount of cash reserves banks must hold; for a bank not stung by writing loans wholesale, it must seem onerous to have prudence rewarded with extra oversight. He also seconded, strongly, Howard Schultz’s call for political reform. We need politicians who are willing to put the country ahead of partisanship, he said, to general applause. “What’s going on in D.C. right now is a trainwreck. It’s absolutely holding us back.”

The Q&A period brought a few refinements to already discussed points. Regarding high unemployment, Ray Davis and Arun Raha both noted that the problem was being exacerbated by productivity increases. Raha went on to say that since about 70 percent of Washington’s unemployment is made up of idled construction workers, there won’t be much change there until the housing sector improves.

On that score, we’ve been under-building in comparison to future demand–Davis claimed that within five years, an actual housing shortage could develop. It remains a bit of a chicken-and-egg situation: Banks of course would be happy to loan against an appreciating asset. So the housing recovery, as has been said many times, rests upon the bulk of the market resetting, with foreclosures and short sales cleared out.

Curious Georges in a conversation with Seattle