On Friday, the Dow Jones Industrial Average closed above 14,000 for the first time since October 2007, and that followed the blue chip index's best January in nearly 20 years.
But a group of San Diego executives painted a far less rosy picture of the economy during a recent Daily Transcript roundtable discussion.
"I think the market's scarier than it could ever possibly be," said Dale Stein, owner and CEO of telecommunications provider and roundtable sponsor Voice Smart Networks. "When do we put people back to work? That's what this country needs."
Carolyn Kling, founder and CEO of financial advisory firm Kling Partners LLC, called the economy "extremely volatile" even while investors are a little more comfortable getting back into the market.
Christopher Schrobilgen, managing director of sales and marketing for DLK Investment Management LLC, said his concern stems from the fact that much of the market's recovery has been manufactured by the Federal Reserve, which has kept interest rates near zero. He wonders how much longer it can keep performing at such a high level.
"The individual investor has been out of this market," he said.
The panelists also agreed that companies face an even tougher challenge in California, which has higher tax rates and more regulation.
The state's voters passed Proposition 30 in November, which raises taxes on the wealthiest citizens in the state — as high as 13.3 percent on those earning $1 million or more annually — and temporarily increases the sales tax by a quarter of a cent.
"The number of people subjected to Prop. 30 are far fewer than those who voted yes for it," said Brad Gastineau, tax manager for Gatto, Pope & Walwick LLP. "There has to be a check and balance. We're driving the high-net-worth people out of our state, and they're the ones who are the employers.
"Somebody's going to have to draw a line and say we've got to reduce taxes. We have to try to invite people into our state to do business. There's just this oppression of doing business in California that, in the long run, is going to really affect our economy."
Pro golfer and Rancho Santa Fe resident Phil Mickelson recently made headlines when he said he might have to make "drastic changes" in his life to combat recent tax increases on both the state and federal level. Some interpreted his comments to mean he was thinking of moving out of California.
Gastineau, whose firm counsels professional athletes, said young sports stars tend to be mobile and have little problem with moving to a state with friendlier tax policies. But it's not only athletes contemplating getting a new, non-California address.
"There's a lot of business owners who really feel that the government is a lot more aggressive in pursuing their income and assets," said Cory Grant, managing partner of Grant Hinkle & Jacobs Inc., an estate planning and insurance firm, "and there's a larger appetite for moving to states with less income tax."
Robert Copeland, a partner with the law firm Sheppard Mullin Richter & Hampton, said the federal government also is going after defense contractors for potential regulatory violations. The government collected $4.9 billion in false claims settlements just last year.
The increased regulatory oversight has created more competition among contractors. Protests on procurement contract bids increased from 1,600 in 2011 to more than 2,500 last year.
Voice Smart Network's Stein said a more permanent solution to the country's economic problems starts with the reduction of America's high unemployment rate, a problem he thinks lawmakers have forgotten.
"Nobody in the government, both state and federal, is talking about the creation of jobs anymore," he said. "We're talking about all kinds of social plans and implementation, but nobody is concentrating on what are we going to do to produce jobs? How do we put 8 million people back to work in this country?"
Grant of Grant Hinkle, said the one bright spot of today's regulatory environment, however, is that it creates a good opportunity for companies and officials to get creative.
"The thing that distinguishes America from any other country is we've consistently led in entrepreneurialism," Grant said. "The culture I grew up in was you work hard and you'll be able to have a good life.
"What people are afraid of is they feel like there's a bull's eye on their back, and it's getting bigger. They see where governments are not run like businesses; they are very inefficient."
He said California has, in effect, a one-party system, which has led to more "takers" than "makers."
"Anytime you have more takers than makers in a society, you're going the way of Europe," Grant said. "How do you go from being a colonial power to a has-been? Well, look at France. That's what people are afraid of. Government is not efficient, and the more powerful they become, the more predatory they seem to be toward people who are making the money."
The panelists agreed that change has to come from the top, mainly government officials.
"(Lawmakers have) to rationalize the services the government's providing with the input that's coming from the private sector and recognize that you can't just over commit the taxpayers to all of these programs," Copeland said.
Schrobilgen agreed that politicians have to change the policies.
"Unfortunately, they're not very far-thinking," he said, adding that when enough businesses leave the state, they'll be forced into policy changes.
Greg Pieratt, a principal with commercial real estate firm Lee & Associates, said the real estate market is showing positive signs for the economy.
The numbers for retail, industrial and office properties all were positive in the fourth quarter, with vacancies down and absorption "way" up.
"These are good signs for landlords," Pieratt said. "It's also a good sign for businesses. Businesses are growing, hiring and taking more of the footprint of real estate in San Diego County."
Stein, however, said more companies are using technology to decrease their physical footprint, setting up remote access for their employees. Smartphones, laptops and video conferencing have all allowed business people to conduct their work at home.
Robert Copeland, Partner, Sheppard Mullin
Brad Gastineau, Tax Manager, Gatto, Pope & Walwick LLP
Cory Grant, Managing Partner, Grant Hinkle & Jacobs Inc.
Carolyn Kling, CEO & Founder, Kling Partners LLC
Greg Pieratt, Principal, Lee & Associates
Christopher Schrobilgen, Managing Director of Sales and Marketing, DLK Investment Management LLC
Dale Stein, Owner/CEO, Voice Smart Networks (sponsor)