Economist Sung Won Sohn — once ranked as the most accurate economist in the country by The Wall Street Journal — said in his semiannual forecast Friday that he expects the local, national and global economies to continue growing slowly.
Sohn, of the Institute for Global Economic Research at CSU Channel Islands in Camarillo, said while economic fundamentals in the United States are "pretty good," the "shenanigans" surrounding Congress are hindering success both within the country and abroad.
"We are creating more jobs, people are being more optimistic, but the biggest liability we have right now is political uncertainty coming out of Washington," he said. "If it weren't for the political uncertainty that I'm talking about here, I think the U.S. economy and the global economy would be much better than it is today."
The former chief economist for Wells Fargo told a group of 65 business leaders, community members, professors and students gathered in Thousand Oaks that job gains, the housing market recovery and increases in domestic oil and gas production are contributing to the country's improving economy.
But Sohn said the progress is hurt by issues like the recent federal government shutdown and continual delays over raising the debt limit, which he said amounts to $53,000 for every man, woman and child in the United States.
"Uncertainties are very, very detrimental to economic growth," he said. "Businesses are saying, ‘Economists are telling me we could have a recession because of Washington — why should I hire people? Why should I build another plant?' "
Meanwhile, Sohn said, "Consumers are saying, ‘If we do have a recession, I could lose my job. Why should I spend money? Why should I buy a car or a house?' "
John Griffin, a business professor at CSU Channel Islands, challenged Sohn on whether government-caused uncertainties are anything more than "short-term disruptions."
"Uncertainty is always a part of our lives," Griffin said. "Businesses generally deal with that pretty well."
Businesses would hire more people and raise wages if they saw greater demand and were selling their products, Griffin said.
"We're not growing very fast, and I attribute that more to a slowing in demand," he said. "Much of that slowing in demand, I think, is because many of the young people — they're not finding work, they're saddled with college debt, and salaries haven't risen that much."
Despite the country's slow growth, Sohn said, the United States is in a better economic situation than other advanced nations, such as Japan and many European countries.
Sohn said he is "reasonably sure the stock market will continue to do reasonably well." Interest rates hit a historic low, and Sohn does not expect them to significantly rise for a "long time" — as much as 100 years.
But the U.S. could improve its economic globalization, he said.
"We have been doing well and we will continue to do very well," Sohn said. "But there's a whole new world out there. We can export, we can import, we can find jobs overseas and we can bring people from overseas and have them work here. We can do more trading. The global economy is very, very important whether you like it or not."
More than just broadening the U.S. economy, Sohn said, Ventura County should also place greater focus on globalizing its local economy.
Ventura County has the second-lowest unemployment rate in Southern California behind Orange County, and its housing market has rebounded, Sohn said.
"Ventura County is a wonderful place to be," he said, "but we can still look beyond Ventura County and do better."
Gary Trow, an Oxnard-based City National Bank vice president, said Sohn's forecast was a confirmation of the increased caution he has seen in the local market compared with the past.
Trow, who has spent his entire 34-year banking career in Ventura County, said a lot of his clients have reduced spending or delayed expansions because of economic uncertainty.
"The economy's still pretty flat," Trow said. "We're seeing some growth, albeit slow. I think the global side obviously impacts more and more the banking world today than it ever has."
Sohn said China's high rate of economic growth has started to level out because of its real estate bubble and growing debt. Meanwhile, Europe is gradually recovering after hitting bottom, and emerging markets such as Russia, India and Brazil are slowing, he said.