It’s time to set markers for the coming year. Here are some of the most important things to watch next year, according to economics columnist Jon Talton.

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Bubble, bubble, toil and trouble. These, asking forgiveness from Shakespeare, are the watchwords of the coming year. And don’t forget Amazon HQ2.

First, though, let’s survey 2017.

In my outlook column a year ago, I called it the big question mark: Would new President Donald Trump govern as a conventional Republican with tax cuts, regulatory rollbacks, killing Obamacare and attacking the safety net? Would he be a populist, as sold to his base during the campaign? And would this affect Seattle’s boom with an anti-city agenda?

As it turned out, both the national and regional economy continued their growth, despite Trump’s scandals and breaking of norms. An effort to kill Obamacare and take health insurance from tens of millions failed. But Republicans finally rammed through a huge tax cut. And embedded in that legislation may be provisions that undo his predecessor’s health-care achievement anyway.

As usual, I laid down no predictions. Instead, my markers were how much Boeing’s slowdown would affect the regional economy (not much); would Trump’s trade threats hurt our export-driven sectors (hard to tell because trade has continued a multiyear slowdown), and would the Trump administration punish blue metros with funding cutbacks (so far, stalled by federal courts).

Seattle’s economy continued to be hot this year — too hot for some — although the pace of growth slowed. We continued to be the crane capital of the nation and lead in house-price appreciation. Amazon kept leasing, including in the new landmark skyscraper going up at Rainier Square.

On to the markers for 2018:

Bubbles

Stocks, bonds and housing appear at or near record highs — and not just in the United States — causing some economists to warn of an asset “omnibubble.” Don’t forget bitcoin. And the debt that will be added to the federal government by the Republican tax measure.

Trump’s determination to swing regulation to favor big banks and Wall Street is yet another cause for concern. We went to this rodeo in the 2000s and the results were ugly.

On the other hand, inflation is low and growth is far from overheating. Much will depend on how the Federal Reserve unwinds the massive balance sheet it accumulated in fending off the worst of the Great Recession.

If I knew the answer here, I wouldn’t need this newspaper job. But it definitely needs watching. This is an aging expansion, and even a mild recession — combined with other forces such as new tax cuts for the very rich — will widen inequality further. Most Americans have yet to recoup their household wealth from before the last recession.

Big Tech’s overreach

A stock-market correction or sharp retreat would badly maul tech shares — and job growth. But beyond that is a growing anti-Silicon Valley mood that touches Seattle, too.

It was captured in a recent article in Wired, hardly a Luddite outlet. The headline read: “The Other Tech Bubble.” As in, the bubble the industry lives in, seeing itself as heroic, successful, driving progress.

Outside, many are less enamored as the “disrupters” break the law, tech hubs see astronomical housing costs, and more.

“In 2008, it was Wall Street bankers,” wrote Wired’s Erin Griffith. “In 2017, tech workers are the world’s villain.” And maybe 2018.

The article contains this gut punch: “As headlines have exposed the troubling inner workings of company after company, startup culture no longer feels like fodder for gentle parodies about Ping-Pong and hoodies. It feels ugly and rotten.

“Facebook, the greatest startup success story of this era, isn’t a merry band of hackers building cutesy tools that allow you to digitally Poke your friends. It’s a powerful and potentially sinister collector of personal data, a propaganda partner to government censors, and an enabler of discriminatory advertising.”

Of course, the bankers got away with it. But the surly mood in much of the nation is not to be ignored.

The Rocky Mountains rise beyond Denver skyline, a top pick for Amazon’s HQ2. (Charlie Riedel/AP)
The Rocky Mountains rise beyond Denver skyline, a top pick for Amazon’s HQ2. (Charlie Riedel/AP)

Amazon HQ2

The company is expected to announce the location of its “full equal” second headquarters. It will be interesting to see if the company was honest about the assets it was seeking beyond incentives — or if it goes out into a car-dependent office “park.”

It will be ominous to watch the state of play in months and years to come, because ultimately there will be one headquarters — barring a breakup. A new effort by City Hall to constructively engage with Seattle’s largest employer is apparently happening — and perhaps just in time.

My HQ2 picks are Denver, Dallas, New York City, Boston and the D.C. suburbs on rail transit. Toronto if Amazon wants to hedge against Trumpism. Dark horses: Atlanta, the Twin Cities and Pittsburgh.

I am assuming Amazon doesn’t want it to be on the same time zone as Seattle, so I leave out West Coast locations. If Amazon is being honest about what it wants, almost every other locale is out of contention.

President Donald Trump and Chinese President Xi Jinping in Beijing. China’s main official news agency is warning U.S.-Chinese relations will face “more pressure and challenges” following Trump’s decision to label Beijing a rival.  (Andy Wong/AP)
President Donald Trump and Chinese President Xi Jinping in Beijing. China’s main official news agency is warning U.S.-Chinese relations will face “more pressure and challenges” following Trump’s decision to label Beijing a rival. (Andy Wong/AP)

Trade

Washington is heavily dependent on commerce with the world, however one measures. It’s No. 3 among the states in merchandise exports, and at or near the top in per capita exports. This contributes to the state’s prosperity, good jobs and economic diversification — but it will continue to be tested by Trump’s “America First” stance.

This year, renegotiation of the North American Free Trade Agreement (NAFTA) has been contentious. The agreement could fall apart in 2018. While life would go on, the economies of the United States, Canada and Mexico are so intertwined that the shock would be severe. It could cause a recession.

Trump also has been tough on China,Washington state’s largest export customer, while trying to flatter Chinese President Xi Jinping. China has sometimes been a bad actor in trade, no doubt. But the administration lacks a coherent strategy for addressing this without harming American jobs — or backing down.

This image provided by the North Korean government on Nov. 30 shows what the North Korean government calls the Hwasong-15 intercontinental ballistic missile, at an undisclosed location in North Korea.  (AP)
This image provided by the North Korean government on Nov. 30 shows what the North Korean government calls the Hwasong-15 intercontinental ballistic missile, at an undisclosed location in North Korea. (AP)

In the life-might-not-go-on category, we have North Korea, armed with thermonuclear weapons and missiles that can apparently reach the continental United States.

Earlier this month, National Security Adviser H.R. McMaster said the chance of war was “increasing each day.” About Pyongyang’s nukes, he said, “We can’t tolerate that risk.”

Even a “limited” nuclear war on the Korean Peninsula has the potential to kill millions.

It amazes me so few Americans are paying attention.

So there it is. I wish you a Happy New Year hoping the dark markers here are proved wrong.