You’ve got to love Bill Conerly, the Portland-based regional economist who was invited by Viking Bank to the island this week to give a pep talk to those most interested in the commodity that makes the world go around. Conerly’s a funny guy with a sardonic sense of humor who, even when there’s bad news shrouding his forecast as there was Thursday, always ends his prognostications with the same uplifting message, or at least a variation on the theme: America, the strong, the resilient, will be just fine. Chill out. And you can take that to the bank. Or, better yet, turn that positive attitude into currency and spend it.

Yes, there is a problem or two (or three, he admits), but corrections will be made to a declining economy and before we know it the economy will rebound. It’s inevitable. He admits there is a modicum of veracity in the thought that there will be a few years of instability as the Federal Reserve makes corrections one way (recession) or another (inflation) to keep the economy humming a cheery tune. A down cycle, yes; a disaster, no.

First, there’s this problem of building too many dwellings, a fact well-established on Bainbridge Island. Real estate loans and mortgage-backed securities represent nearly half of the percentage of assets of the country’s commercial banks, so the housing industry’s meltdown is serious business. Still, Conerly figures that the nation’s fundamental demand (families) will catch up with the oversupply by the end of 2009. When that happens, banks, at least the responsible ones, will quickly recover. Growth will be the determining factor, he says, which means the region and certainly Bainbridge will lead the upturn because, as people have discovered, this is the place to live.

Second, the credit crunch – especially business credit – has dramatically increased the cost of doing business, but the $700 billion buyout is already addressing liquidity and capital problems, though he admits the new program is far from perfect. His biggest fear is that too many banks will be hesitant to make loans to even healthy businesses. Still, he thinks the banking industry will adjust its attitude and correct the problems in only a few months.

Third, as he puts it, “consumers’ attitudes suck,” which means, “We’ll have a Wal-Mart Christmas this year, not a Nordstrom Christmas.” No doubt, consumer spending during the current fourth quarter will be stringent. The biggest problem, Conerly says, will be people with jobs because there are a lot more of them than people without jobs, and the employed ones are very nervous about losing what they have. Will they? Some, of course, but not as many as initially feared .

He predicts, in fact, that people who tuck money away during this period of consumer paralysis will have greenbacks burning holes in their pockets and spending will commence during the first quarter of 2009. Plus, exports will continue to grow and government activity will flourish and soon we’ll be in the second quarter of 2009 and feeling better about ourselves.

How good? Well, not exactly giddy because we’re probably going to be paying for our latest financial misdeeds for many, many years to come. “If you buy stock now you will be happy you did…10 years from now,” is how Conerly encapsulates the predicament. Har-har.