ORANGE COUNTY, CA-Renowned economist Michael J. Boskin bore mixed tidings for the region when he spoke at an economic summit held yesterday in Orange County.

“Southern California is unlikely to be affected nearly as much as the Bay Area, but it will be affected. It’s not immune,” Boskin said, addressing a packed room at Newport Beach’s Four Seasons Hotel. Boskin shared the stage with California State Treasurer Philip Angelides at the Southern California Economic Summit, which was sponsored by Buchanan Street Partners and First American Title Insurance Co., among others.

On the state level, Boskin said travel and tourism are two sectors that have been hard hit and will continue to be sluggish until at least early 2002. “That affects our state and local governments in various ways, our airports, hotel taxes, our cities, etc.” The Gross State Product is also expected to shrink, Boskin added, saying it will rebound next year. “This will be the slowest growth we’ve had in a long time, (but) it will be growth,” he commented. “We may not feel good about the state economy until 2003, but it should start growing again sometime in the early part of next year.” In the meantime, unemployment is expected to rise still higher, as Boskin predicts that there will be at least one more round of layoffs. “A mild recession and a gradual recovery is my outlook for the state,” Boskin said.

For the nation as a whole, Boskin predicted that we should be out of the recession by the second quarter of next year, leading to a muted recovery for the economy. “But there certainly is a risk that this could get worse…it’s because the rest of the world is in trouble,” he warned. Boskin said his long-term outlook for the United States is optimistic, while it is pessimistic for Europe and only cautiously optimistic for regions such as Latin America and Japan.

Despite his news of a continued recession, Boskin did point out that there are still deals to be made, especially on a local level. “There’s obviously going to be lots of opportunity in this time of adjustment as prices come down and people work things out with their lenders,” he said.

During his time at the podium, Angelides stressed the importance of this continued investment, urging the audience to think of ways in which they can invest in the state’s physical and human infrastructure. “I believe that if we commit ourselves to an ethos of investment in California that we can and will prevail,” he said.

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