Neely Young: Let's Tell Our Story
One wish I have for the Georgia legislature is that they give city and county governments grants to help them with economic development. The new leadership in the house is trying to find new monies to make up for the hole in state revenue caused by the recession. Let’s get aggressive in touting our assets and telling our story.
Economist Al Niemi’s comments should give them reason to help local governments develop new ways to attract industry and produce more jobs. It is important, because any such efforts will also produce more revenue for the state.
The following is a synopsis prepared by Bill Cooper, retiring Cobb Chamber President, of Dr. Niemi’s remarks at the recent Bank of North Georgia’s annual get-together at Cobb Energy Centre.
Dr. Niemi has been giving economic forecasts for Georgia for the past 16 years. He is a former University of Georgia business school dean and is currently dean of the business school at Southern Methodist University in Texas.
Niemi reports that Georgia is underperforming relative to the national average. Georgia’s Gross Domestic Product is down 3.8 percent compared to 2.7 percent nationally. In 2007, 110,000 new homes were built in Georgia. In 2009, fewer than 18,000 were built.
It will take our state longer to come out of this recession because we have a large glut of unoccupied residential and commercial property that will drag down recovery.
Niemi says that unemployment was 25 percent in the 1930s depression. Today, Georgia is at 10.2 percent with the possibility of hitting 11 percent this spring.
When the recovery comes back it will be very slow at best. It will be a jobless recovery, keeping unemployment high and resulting in a lack of consumer spending.
Niemi predicts that there is a possibility of a double dip recession because the stimulus dollars will run out in 2011. This will hit colleges and universities hard. Niemi is also worried that interest rates will rise because of increased federal spending.
He says that consumer spending is 70 percent of the economy and that Georgia households have lost 22 percent of their net worth in the past two years. As a result of this loss, people are replenishing savings and not spending. An example of this reduced spending: Auto and truck purchases are down 30 percent from past levels.
The economist does not believe the federal stimulus dollars help the economy because most of the money went to assist states in dealing with the recession and did not help employment.
A lot of it, he says, went to pork barrel politics from both political parties.
Niemi related that when the Bush tax cuts expire in 2010, taxes on the wealthy will increase and hurt the economy even more. When this happens 50 percent of the taxpayers will be paying 90 percent of all federal income taxes, which he believes is an untenable situation.
So, taking Niemi’s comments into consideration, it’s fair to say that if the Georgia Legislature would make it attractive for cities and counties to promote Georgia’s best assets to industries looking to make a move to our state, some of those draconian consequences he predicts could be avoided.
Compared to states above the Mason-Dixon line, Georgia has a pro-business climate, a skilled work force, a diverse and progressive population, plenty of natural resources, low labor and land costs and good infrastructure. We have a heavy concentration of fine colleges and universities – public and private. We have a technical college system that is second to none. Our deepwater ports at Savannah and Brunswick are thriving, and Atlanta’s Hartsfield-Jackson International Airport is the busiest in the world and puts every city and county in Georgia within reach of national and global markets.
In the past, our state has exceeded the national growth rate by 50 percent or more. It could happen again. We need the tools – and the funding – to tell our story to the rest of the world.
It is a story worth telling.