A strong commercial real estate market always includes two essential elements: job growth and capital liquidity. Right now, we don’t have much of either one. Peter Linneman, the Wharton Professor of Finance and Business and Public Policy, shared his thoughts this morning at the ULI conference on what it will take for the economy to get back on track.
On the jobs front, Peter feels we need to put 3 million people to work each year for three years, including 1.8 million new positions and 1.2 million repositioned workers. If we can achieve that – and it’s not an unrealistic goal if we can stop the ballooning deficit – we’ll be back to a 7.5% unemployment rate.
Peter had an interesting take on the government’s role in financial standards. What we need is “predictability of rules” even if the rules are kind of lousy. What we don’t need is continuation of a situation where nobody knows the rules—some institutions are bailed out while others are left to fail, healthcare and banking sector reforms are up in the air. One council member referred to this condition as “a state of suspended animation.
How ever the upcoming elections turn out, I hope the people left in charge of government are listening to people like Peter.
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