By By JONATHAN CLAYBORNE
Staff Writer
Leading economic indicators demonstrate the United States is well on its way to recovering from the Great Recession, but the recovery will continue to be slow and painful, according to Rick Niswander.
“We went on a humongous binge, and our head still hurts,” Niswander, dean of East Carolina University’s College of Business, told around 100 guests and members of the Beaufort County Committee of 100 on Thursday afternoon.
“Virtually everything you look at has the seeds of the economic recovery,” he said during a speech at the Washington Civic Center.
Niswander cautioned against focusing on unemployment numbers as the main measure of the economy’s overall health.
Employment is “a lagging indicator,” and employment figures typically don’t begin to rise until recessions are over, he said, adding, “This one will be no different.”
“We shouldn’t look at the unemployment rate as an indicator of whether we’re getting better or not,” Niswander said. “It’s the last thing that’s going to happen.”
Unemployment remains high, but likely will fall a bit and hover around 8.5 percent to 9 percent through the end of the year, he forecast.
“That’s a number that’s very high historically, but it’s not going to get fixed quickly,” he said.
Still, the economy has stabilized, and “the worst is behind us,” Niswander said.
“We went for two years with negative job growth in this country,” he said. “That’s why the unemployment rate’s at 10 percent.”
Commercial loans — loans to businesses — remain in negative territory, and they have been every month nationwide since 2009, spanning a period of about a year and a quarter, according to Niswander.
Other components of the economy — from personal income to retail sales — are roughly back to normal or cycling through normal ups and downs, he said.
“Again, we’re not better, we’re getting better,” Niswander said.
The Troubled Asset Relief Program funds deployed in the waning days of George W. Bush’s administration, and extended under President Barack Obama, had an initial price tag of $700 billion, he said.
The amount needed to be large, Niswander asserted.
“The reason for that is we’ve got a huge ($14 trillion) economy,” he said. “The (bailout) numbers are huge to us, but tiny overall.”
Nationally, amounts of $10 million to $30 million are “budget dust,” he said, adding, “That about doesn’t matter in relation to the U.S. economy.”
The recovery measures were “very imperfect,” he said, but they addressed “the right kind of issues at the right time,” and were large enough to make a difference.
Later, during the question-and-answer portion of Thursday’s event, Niswander further underscored what he spoke of as the necessity of the biggest actions Bush and Obama took to shore up the economy.
If not for TARP, “We would be talking about the Great Depression No. 2,” he said.
The end of 2008 ushered in a near collapse of the global banking and finance system, Niswander said.
“It isn’t going to fix itself quickly, and it isn’t going to fix itself painlessly,” he said, “and if we think it is, we’re deluding ourselves.”
Asked about the national debt, he said the remedy probably requires higher income taxes and reductions in services.
He said that Democrats and Republicans in Washington, D.C., have made mistakes, and that neither party has a monopoly on answers.
Asked who was to blame for the financial debacle, he indicated that greed, as with blame, was abundant.
“I place the blame on every single person in this country, quite frankly,” Niswander said. “This problem was caused by greedy folks on Wall Street; it was caused by greedy folks on Main Street, too.”
Summing up his advice to those curious about how to behave during and after the recovery, he quoted Confucius: “When prosperity comes, do not use all of it.”