Goodman says still many factors that could impact nation’s full economic recovery
By Bonnie Adams, Government Editor
Westborough – Although impacted, Massachusetts has weathered the recession to a lesser degree than most of the country, according to economic sociologist Michael Goodman. But state officials would be wise to be cautious, he added, because a number of factors such as increasing food and fuel prices, as well as the looming economic crisis in Europe, could have significant negative rippling effects.
Goodman was the guest speaker at the Corridor Nine Area Chamber of Commerce breakfast held at the Doubletree Hotel Sept. 27.
He currently is an associate professor and chair of the Department of Public Policy at UMass-Dartmouth, where he directs the Master of Public Policy program. He is also a co-editor of “MassBenchmarks, the journal of the Massachusetts Economy,” published by the UMass Donahue Institute in cooperation with the Federal Reserve Bank of Boston.
At the Corridor Nine breakfast, Goodman said that the commonwealth has consistently been a “leading producer of productivity enhancing goods and services.” As such, the state had “benefitted disproportionally” in regard to much of the rest of the nation.
“But Massachusetts can’t continue this pace forever,” he added.
While the life sciences and technology fields have done well, some sectors such as construction and other building trades have not yet made a significant recovery. Not surprisingly, he added, some of the state’s areas with lower education rates were also still suffering the effects of the recession.
“Industries are being left behind; cities are being left behind,” he said. “We are living through a blue-collar depression.”
Goodman noted that in recent years, U.S. households had “lost $7 trillion of household wealth.”
As home equity is the prime source of most people’s wealth, he said, homeowners naturally start cutting costs across the board.
“It’s a reality check,” he added. “You can’t take that much out of the economy and not feel it.”
Issues surrounding housing also are of concern. Although housing sales appear to be on the upswing, he said, many appear to be short sales. There is also a long-term shortage of affordable housing. As a result, fewer new households are forming, which in turn delays a strong recovery.
“While overall inflation remains low by historical standards, fuel and food costs are expected to rise in the coming months,“ he said.
The questions surrounding the issue of climate change may be up for debate, Goodman noted, but significant droughts in parts of the country certainly would impact food growth and in turn, the price for that food.
The ongoing economic crisis in Europe was also a concern, he added.
“We need to care about what is happening with European banks,” he said. “Europe is an important trading partner, particularly in the health care and life sciences fields.”
Institutions need to start to loan more money, he said, and the country needs to make more investments in infrastructure such as roads and buildings while interest rates are at a historic low.
The nation’s political leaders need to put aside their differences and work together to find solutions for the country to truly recover, he said.
“We can’t tax our way out of this problem, but we can’t spend our way out of it either,” he added.
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