Georgia joins nation in recession
Albert W. Niemi Jr., dean of the Cox School of Business and an expert in economic growth, economic forecasting, and American business history, talks about the recession and its impact on Georgia.
By Bob Pepalis
JOHNS CREEK – Georgia is in a recession, along with the rest of the nation, according to Dr. Albert Niemi Jr., dean of the Edwin L. Cox School of Business at Southern Methodist University.
Niemi presented his 2009 economic forecast for Bank of North Georgia at Atlanta Athletic Club Dec. 3, in which he said the entire nation has been in a recession for the past six months.
"It's going to be like this for at least another 12 months," he said.
Georgia, however, is in much better shape than most of the country. It is one of five states Niemi said will have 60 percent of the nation's growth from 2010 to 2030. More than 55 million people are expected to boost the nation's population in those two decades, many of them continuing the trek south to find jobs and better opportunities than in places such as the northeast or Midwest.
"People go where the jobs are," he said.
Where there are jobs, that's where consumer spending will be found. Until consumer spending recovers, the recession won't end, either.
Conventional wisdom suggests the recession will end in the third quarter of 2009, but Niemi said he's changed from an optimist to a pessimist, saying it will take another quarter for recovery.
"I think the recovery happens early in Georgia. I think the recovery happens very early in Texas," he said.
"Don't get too pessimistic. Think long term," Niemi said. "Don't worry. Between 2010 and 2030, this is where you want to be."
What caused the recession?
"In a nutshell, it was overextension of credit," Niemi said.
Government borrowed too much, individuals borrowed too much. People bought houses they couldn't afford. Businesses overexpanded, all because easy credit was available.
The national unemployment rate at the end of October was 6.5 percent, with Georgia's higher because of its growth in real estate.
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