Categories
Business and Economy News Transparency and Elections

Economic Recovery Elusive; Fears of Double Dip Recession Loom

The next Tennessee governor will have handful grappling with economic woes in Tennessee. The question all the candidates have to be wondering is if the trouble ahead is fully known, or rather about to get worse than expected.

A read on gubernatorial candidates in recent days, seeking their interpretations of where the economy is headed, was very much like getting a read from economists.

There is no unanimity of opinion.

Candidates are certainly not experts at economic predictions, but they travel the state constantly and are in about as good a position to gauge the economic landscape across the state as anybody. They talk to a lot of people in a lot of sectors, and they listen as they go.

The next governor and General Assembly will have to grapple with economic woes regardless of which way the pendulum is swinging next January when the new administration takes office, but any person running for governor has to be wondering if the trouble ahead is known or about to get worse than advertised.

Knoxville Mayor Bill Haslam, who routinely tells voters the state will have a $1.5 billion hole to deal with, still believes the longterm view is positive.

“The stock market is not always the most accurate reflection of the economy,” Haslam said. “There are so many other things involved than that. I think we’re in the early stages of the recovery, but I think we have a long way to go, and I think employment is going to lag in this recovery.”

Tennessee, like the nation as a whole, is seeing encouraging pockets of economic news. Earlier this month, the state said revenue collections for April were at a net positive growth of 2.23 percent over the same month a year ago. April revenues were $1.243 billion, $43.4 million more than budgeted. It was the state’s first positive sales tax growth month in nearly two years. The state’s unemployment rate for April was 10.5 percent, an improvement by one-tenth of a percentage point over March.

But one of Haslam’s rivals for the Republican nomination believes Tennessee is still in for a remarkably difficult time.

“I’ve been in all 95 counties, and I cannot see an economic recovery,” said U.S. Rep. Zach Wamp of Chattanooga. “The stock market, I’m concerned, is responding to the global economies of Greece and Europe and weak economies frankly because of large government debt.”

With the lingering problems in the global economy, questions are rising as to whether the previously bleak projections have told the full story. The bad news could get worse. Wamp says the United States needs to change its approach.

“We’re headed in (the wrong) direction, unless we reverse some of our decisions as a nation in terms of spending, consumer confidence and confidence by small business people,” said Wamp. “Investor confidence and other governments’ confidence in our ability to repay our own debt is not going to come back, and that slows the economic recovery. I still think we are months, if not years, away from an economic recovery.”

Lt. Gov. Ron Ramsey, R-Blountville, who has taken pains to remind voters at every turn that federal stimulus funds run out next January, said he wasn’t sure if the nation is in a recovery or not.

“I was hoping for a turnaround. For the first time in months we saw an uptick in revenue,” Ramsey said. “But I think it’s going to be a long, slow recovery, not a quick upturn. I know some on Wall Street are calling it a double dip. Who knows? If I knew, I’d be the richest man in the world.”

But Ramsey who has an auction and real estate business, has noticed some improvements that hit close to home.

“I tell you, it’s feeling better in the real world, as far as the real estate market,” Ramsey said. “In the last few weeks, I’ve seen upticks in my business in particular. It could just be spring fever. The real estate market always picks up in the spring. So who knows?”

Democrat Mike McWherter, who has locked up his party’s nomination, points to what has become a common expression — jobless recovery.

“My sense of the situation is that we are at the bottom of this recession,” McWherter, who owns a beer distributorship in Jackson, said. “But the problem we’ve got now is that the recovery seems to be a jobless one. That’s why I’m focusing on creating jobs here in this state.

“That’s what my program is about, recruiting industry and how we give incentives to existing businesses to add employees. If we do that, if we get people back to work, there’s no question we’ll be in a full recovery.”

Another Republican candidate, Joe Kirkpatrick, who has participated in several gubernatorial forums although he’s vastly underfunded by comparison to his opponents, sees no sign the economy is in a recovery.

“It’s clear that we’re not,” Kirkpatrick said. “The very idea that we were ever in one was smoke and mirrors.

“We’re at 10 percent unemployment. With those who have quit looking for a job, those that are underemployed, you’re looking at between 20 percent and 30 percent out of work.”

Haslam said he sees employers being cautious.

“I’ve talked to a lot of employers who said, ‘My business is slowly getting better, but I don’t feel confident enough to go hire people back yet, or when I do I’m hiring temporaries,'” Haslam said.

The Tennessee Department of Labor and Workforce Development said this month that Tennessee’s workforce, at 3,028,500, is the highest since May 2009 and that the number of unemployed, 318,000, is at its lowest since March 2009.

Leave a Reply

Your email address will not be published. Required fields are marked *