Local Economist Sees Bright Spot in Gloomy Economy

By Michael C. Jordan

Although the National Bureau of Economic Research dated the end of the late aughts’ recession to be June 2009, high unemployment numbers and increased poverty levels would not let you know it. The last two years have been spent in sluggish economic recovery, departing from the longest recession since the Great Depression.
“We’re in a very slow and fragile recovery.” Dr. Stephen S. Fuller, director of the Center for Regional Analysis and Professor of public policy at George Mason University, said in his opening remarks to his lecture on The 2nd Year of the Recovery: Performance and Outlook, which was held Tuesday, October 19th, at Northern Virginia Community College’s Loudon campus.
Fuller was preaching a different message than many of the doom-and-gloom tales political pundits spun leading up to the recent midterm elections. He spoke straightforwardly and emanated optimism, as well as realism. He enlightened the audience with graphs and numbers that made the recovery perceptible, sharing with us the findings of his organization, and the many factors that contributed to the economic recovery, both regionally and nationally. He began his lecture by trying to reassure those who were worried about the risk of another recession.
“You can’t have a double dip after two quarters,” Fuller said. According to Fuller, the U.S. recession has currently been through five quarters. We seem to be out of the woods. Comparing our latest recession with the past three recessions, our GDP is following the upward trend of the 1991 and 2001 recessions. The early 1980’s recession had a much faster boom because the economy was more global and less manufacturing oriented, Fuller noted.
But despite the growth in our GDP, jobs seem to be at the heart of most Americans, and Professor Fuller covered this thoroughly. The unemployment rate has risen to 9.6% because of several factors. One of the biggest contributing factors to the unemployment rate is the status of the housing market, he said. When people cannot sell their houses, their job search is limited to the locality of their house. Because 75% of the unemployment number is low skilled workers (construction, manufacturing etc.), the housing market determines whether they have projects to work on.
Regionally, however, Fuller noted that the outlook is brighter. Washington and Northern Virginia are not doing quite as badly as other cities. Our unemployment in Washington, DC is 6.2%, which makes Detroit, Miami and Los Angeles’ unemployment rate look daunting. But Fuller downplayed the nearly 10% national unemployment rate, mentioning other governments with much higher unemployment rates.
Dr. Fuller also has a firm stance on the much-debated Obama administration’s intervention: he believes the stimulus was necessary. He compared it to a conduit, which had to be unplugged to allow current. The stimulus, he said, allowed the economy to get moving again. Without it, Dr. Fuller said he believes the country would have suffered from an economic collapse so great that it would have gone in the books likened to the Great Depression. He also gave the previous administration of George W. Bush credit by praising the value of his Troubled Asset Relief Program, which has been reviled by both the left and the right since its birth.
But most of the audience there seemed to be interested in the future. Towards the end of his presentation, Fuller gave us an economic forecast. The Center for Regional Analysis predicts little activity within our recovery. Gradually, they expect that the numbers will look better: unemployment subsiding and GDP slightly climbing. Most of their estimates are flattened out, rather than profound peaks. After 2015, the state of the economy is unknown. When asked about another recession, Fuller said one is inevitable circa 2015 or soon after.
“There needs to be an economic propaganda program,” he said, just before leaving. “People are basing the state of the national economy on what they’re feeling personally… People don’t know that the economy is actually doing well,” Fuller added, essentially summing up his thesis on the economy as it stands now: the recovery is doing fine, but people are not feeling the progress regionally or nationally.

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