This is a question that has come back into the media, primarily due to the presidential campaign. However, it could be easily applied to Baltimore’s most recent event, the Grand Prix.
Is Baltimore better off than it was last year as a result of the Grand Prix?
This next statement should be noted as this may be a first. Economists, mainly me, probably overestimated the economic impacts of last year’s Baltimore Grand Prix. The number of out of state and out of town visitors was not as large and the retail activity was not as big as was expected in last year’s Grand Prix.
So are we better off this year? I say, unequivocally, yes. Baltimore is now on the path to hosting a third and perhaps a fourth Grand Prix. Baltimore’s image is being remade from a setting for The Wire and Homicide: Life on the Streets to a national stage where fast cars race around the streets of Baltimore, not being pursued by the police, but in pursuit of a trophy.
Now, on the matter of the economy, are we better off since 2009?
I say yes. In the first seven months of the Obama presidency, the nation was shedding over 600,000 jobs a month, home prices were falling, foreclosures were increasing, unemployment was rising, consumer confidence was falling and lending activity was way down both for commercial and consumers. These outcomes were driven by the economic policies of the prior administration. So what has happened since?
- Comparing the most recent seven months of the Obama administration, the nation is generating over 150,000 jobs a month, primarily in the private sector as the federal government has been shedding jobs. This is an average monthly gain of nearly 750,000 jobs as compared to this time in 2009.
- Home prices have stabilized, rising by an average 2.2 percent per month as of July, compared to a decline of 1.3 percent per month in 2008.
- Unemployment was rising at a staggering 3.3 percent per month in 2008, but has begun to decline at a steady rate of 0.3 percent this year.
- Foreclosures have slowed considerably compared to 3.2 million foreclosure filings at the end of Obama’s first year as President. RealtyTrac paints a better picture of housing in the U.S. as foreclosure filings for the year thus far are 1.3 million.
- According to The Conference Board’s monthly consumer confidence index, throughout 2008 consumer confidence was falling at a rate of 5.8 percent each month. In 2012, it has been rising slowly at about 0.1 percent per month. Lending activity has also begun to turn around.
- According to the Federal Reserve Board’s survey of senior loan officers, the average net percentage of senior loan officers who felt that standards were tightening versus easing each quarter in 2008 was 61.7 percent. In 2012, the average net percentage of senior loan officers who felt that standards were tightening each quarter was negative 5.4 percent. The consensus, based on the survey, is that standards remain tight, but are not expected to tighten further in 2012.
These outcomes were driven by the economic policies of the current administration. So I would say yes, we are better off. Finally and probably the most importantly, the Orioles are in first place and hopefully they will stay there. So Baltimore is definitely better off!