Iowa 'Goldilocks' economy needs more trade, economist warns

Ernie Goss, Creighton University professor of economics.
Ernie Goss, Creighton University professor of economics.

JOHNSTON — Iowa’s economy is not so hot it’s pushing interest rates up and not so cool that it’s not creating jobs.

“I call it the Goldilocks’ economy,” economist Ernie Goss said Friday.

The Creighton University professor who studies Midwest state economies warned, however, that the shortage of properly skilled workers and potential loss of agricultural export markets could offset any potential benefits of recently enacted tax reform.

CEOs of rural banks in 10 Midwest states tell him their economies are not expanding.

“The other 80 percent said it’s moving sideways,” Goss said during the taping of Iowa Public Television’s “Iowa Press” that airs at 7:30 p.m.tonight.

Tax reform will have some positive impact in Iowa, he predicted, especially a provision that allows the immediate write-off of agricultural costs, such as planting equipment.

“That’s going to be very good (for farmers), and that’s going to help implement dealers in the communities,” Goss aid.

But he’s “less than optimistic” about trade. Economists agree on few things, Goss said, but “99 percent of economists see trade as a real positive.”

So it concerns him to hear predictions the North American Free Trade Agreement negotiated by President Bill Clinton with Mexico and Canada might be ended.

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“Are you kidding me?” Goss said. “NAFTA is very important to the state of Iowa. It’s very important. We’re talking about thousands of jobs related to NAFTA. So what I would encourage is greater trade.”

He hopes President Donald Trump’s talk about ending NAFTA is just a negotiating strategy.

“Whether I agree with him on this or that, I disagree with him on trade — unless he’s negotiating,” Goss said. “He wrote the book, ‘The Art of the Deal,’ I didn’t.”

He’d also encourage more immigration — legal immigration, especially among foreign citizens graduating from Iowa colleges and universities.

“We have invested in them,” Goss said. “Let’s encourage those individuals to stay in our country. And, as I said, we have labor shortages.”

Iowa Press can be seen at 7:30 p.m. tonight and noon Sunday on IPTV, at 8:30 a.m. Saturday on IPTV World and online at www.IPTV.org.

l Comments: (319) 398-8375; james.lynch@thegazette.com

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