Waller: No shortcuts to fix economy

RANGELY — When Peter Waller spoke at a Community Networking meeting Feb. 24, it was obvious what was on everyone’s mind.
The economy.
“They gave me 45 minutes, and I talked for two hours,” said Waller, president of First National Bank of the Rockies, which has offices here and in Meeker. “The crowd was very interested, very concerned and very much engaged.”
Waller, who used to live in Meeker but now lives in Grand Junction, said he was invited to the monthly Community Networking meeting to talk about “the current state of the economy, the credit markets and banking issues.”
Waller said “a real nice mix of people” attended the program, held on the campus of Colorado Northwestern Community College.
“I started off talking about how we got where we are, and then I shared my thoughts about how we might get out of it,” Waller said.
The housing market is a big part of the problem, Waller said.
“The main culprit in this current economic debacle is housing,” he said. “We were putting people in homes they couldn’t afford with loans that were ill-structured. These loans weren’t made by the real banks, but by unlicensed mortgage brokers, non-bank lenders, and were sold into the secondary markets and bought up by Wall Street investment banking firms.
“That, combined with (former Federal Reserve Board Chairman Alan) Greenspan leaving interest rates too low for too long created a flood of easy money,” Waller said.
At the same time, he said, the global market “just produced too much stuff.”
“Essentially, throughout the world, we manufactured way too many cars, way too many computers, too many television sets, too many shoes, you go right down the line,” he said. “We have created this disequilibrium in supply versus demand.”
So, how does the country climb out of this economic mess? Waller said, in his “layman economist’s” view, there are no shortcuts.
“It will take awhile to get through this,” he said. “We have to use this stuff up. And, in the meantime, the worst thing we can do is produce more stuff. So, in order to use up this excess stuff, we’ve got to stop making more and use it up to the point where we reach equilibrium between supply and demand.”
Not only are there no shortcuts to fixing the nation’s economic problems, but it will be a painful process, Waller said.
“It’s going to make unemployment go up and up,” he said. “But once we reach equilibrium, and market forces begin to normalize, we’ll begin to produce again, and we will slowly come out of this. When we do, there will begin to be a need again to produce new stuff.”
Northwest Colorado is better positioned to weather the economic storm than other parts of the country, Waller said.
“We’re very fortunate to be where we are, not only because we live in one of the greatest places in the nation as far as recreation and aesthetics, but the economy here is very good compared with the rest of the country,” Waller said.
But the market in northwest Colorado is not immune. It is feeling the effects of the economic downturn, he said.
“We have seen (housing) sales slow down here on the western slope pretty dramatically,” Waller said. “Largely, because people coming here looking for work can’t sell their home where they are coming from, so they can’t put equity down on a home here.”
Asked how long before the economy starts improving, Waller said, “There’s no way to tell.” But he’s hoping sooner, rather than later.
“How long it will last? Everybody has their opinions,” Waller said. “My guess is that the government throwing so much money at this thing, we’re going to begin to see some signs of recovery fairly soon. How long that will last is the question I have.”