Oklahoma wallows through the economic downturn while other states drown
Urban Tulsa Weekly
Aug. 17, 2011
Nestled in the center of the nation, Tulsa is far from the volatile stock markets in New York City, though that doesn't mean we are protected from its eventual dramatic financial reverberations.
Last week, the stock market wobbled violently, with the largest drops since the beginning of the downturn in 2008. International markets are shifting like tectonic plates before a massive earthquake.
Internationally, things are uncertain.
"The European Central Bank cannot bail out everyone, and it's become increasingly obvious that the measures they have taken aren't working anyway," said Gary Casey, General Interstate Insurance Agency vice president.
"Italy, Spain and Portugal are also on the ropes," he said. "Like many European nations, we cannot sustain our debt."
Back home, the United States is struggling with a reduced credit rating and a ballooning debt ceiling while its citizens are already careworn by a deep, years-long recession.
So what does this mean for Tulsa's financial destiny?
Scott Meacham, former Oklahoma Treasurer from June 2005 to Jan. 2011 and current director of Crowe & Dunlevy Law Firm, explained Oklahoma's financial outlook to UTW recently.
"The story in Oklahoma and Tulsa is better than the national landscape," Meacham said.
Citing good sales tax numbers, he said, "People are still buying things and feeling good.
"Our unemployment numbers look better in Tulsa and in Oklahoma than they look from a national perspective," he said.
Meacham said he thinks Tulsa's large oil and gas industry has helped keep our economy afloat. Add to that the city's focus on the aerospace industry and we've got an effective insulator from a sour national economy. At least for now.
"Tulsa's aerospace focus and especially the maintenance side of that works as a kind of counter-cyclical balance for the Tulsa economy," Meacham said.
"When the economy isn't as good, the big airlines put off buying new airliners. So they spend more on maintenance," he said.
Tulsa's focus on the maintenance side of the airline business helps counteract negative factors in the economy.
Plus, we've got a large stable of small, local businesses that aren't directly affected by the stock market rollercoaster.
Financial drama will slowly seep into our borders through increased food and gas prices though Tulsa's large number of small businesses and relatively small number of publicly-traded companies protects us from large drops on Wall Street.
The Tulsa Business Journal's "2010 Book of Lists" showed there are only 17 large publicly-traded companies in town. The Williams Cos. leads the pack of mostly oil and gas heavy hitters, like Oneok and Arena Resources.
On the other hand, the Tulsa Metro Chamber of Commerce lists 25 large private companies doing business here. St. John Health System comes in number one, employing 3,675 people.
"If you're in a good business, I think that also helps insulate you from the national economy," Meacham said.
"The reason big companies got themselves in trouble was by making big bets on things they don't understand," Meacham said. "Small businesses don't do that."
Posted on Wed, August 17, 2011
by Crowe & Dunlevy