Is Austin recession-proof?

Forbes thinks that Austin is recession-proof. I'm not an economics expert, but their reasoning makes sense to me and things still feel very strong.

Comments

[carl de Cordova]

Recessions are in that funny class of things that you cant see until they have happened and are over. And even then, economists will argue about when things began and when they ended.

Heck, Economists cant even agree on whether Economics is a science or not...

My personal view is that this American economy is doing great if your a non-microsoft IT person or open source/Mac/Unix professional or a relatively open minded liberal professional with an entrepreneurial bent. During the early years of this millennium it ain't been so good to be a .com'er... (dotcom'er) However, 2001-2006 was a boon period for security guards and soldiers of fortune... That seems to be ending. Now that everything a geeky gear obsessed computer nerd raised in the 1970-90's heart desires has fallen to almost $0, 2008 is a great time to be alive. Less money for hardware means more money to pay the experts by the hour to make it all work. And Austin is full of those kind of people so i think Austin is going to do just fine in the next few years.

As the Austin band Timbuk3 used to sing... "Future is so bright ya gotta wear shades".

Things a geek needs like memory, photon collection and display devices, automation and electron storage will continue to fall in price while things we don't really "need" as much of like hydrocarbon fuels and red meat will continue to go up. Fuel cells, high speed fiber net connections, hydrogen power, solar panels and mass transit will be coming down in the near future which should more than offset the rises in the costs of Latte, cotton t-shirts, tofu salad, fuel oil and fresh retail produce. Especially for the tech inteligencia.

Your milage may vary.... Fixed income old folks are probably not going to see things in such a rosy light as we begin to see some inflation as a result of the polices of the current administration. Baby Boomers and their parents have been doing really well in this age of low inflation and cheap chinese goods. For them, food, housing and transportation will be less easily affordable. Retired military, industrial, educational folks on fixed incomes are going to get squeezed pretty good in the next few years because their COLA's (cost of living adjustments) will not keep up with inflation. However, those mobile and/or young enough to change jobs or who are working in jobs that are not stagnant will have no problem because their income will rise faster than inflation and things like houses, while going up in raw dollar terms will become relatively cheaper for those who are in the prime of their careers.

I don't shed many tears for the old folks however... they have had it pretty damn sweet since the end of world war II and they can sell off some of their assets at inflated prices to the younger cash flush tech kids and still have plenty of money to live on for the rest of their lives. The people who I feel sorry for are the young "wallmart" style employees (working poor) who are trying to raise multi child families on multiple horrible low wage jobs. If a hamburger goes from $5 to $20 the well employed wont care if their salaries double to keep up with inflation. The Low end/dead end hard working poor however will face a terrible future if they cant find a better way to make more money.

A weird side consequence of this is the illegal immigration issues that are front and center in todays right wing political discourse. If we have a solid bout of inflation without the low end wage increase to go along with it, many of them will just go back to their home countries or not make the dangerous trip north to begin with. In the same way that the National Debt just goes away as a political issue if you have enough inflation, so goes the Illegal Immigration issues as it gets harder to make a low end living in the USA.

Carl de Cordova

[Nathan Zook]

The article suggests only that we are doing fine in this recession. The headline is completely unsupported by the article.

BTW, a recession is defined as two consecutive quarters of economic contraction--have we even had one yet?

[Berko]

I think what's more likely true is that Austin is on the tail end of cities impacted by a large recession ...