NORTHUMBERLAND — There’s a one in two chance the nation could enter another recession next year, Anirban Basu said Thursday.
It won’t be as deep, but it will be more painful than the recession of 2008.
“In 2008, unemployment was at about 5 percent,” he told the Greater Susquehanna Valley Chamber of Commerce on Thursday. “If we go into a recession again, unemployment right now is about 10 percent.”
He did have a bright spot: The states that are doing well relative to the last collapse are those who are providing food and energy. And the potential from natural gas extraction from the Marcellus Shale formation puts Pennsylvania — and, possibly, the Valley — in a good position, he said.
Basu is chairman and CEO of Sage Policy Group, a economic advisory company based in Baltimore. He was invited to the Valley to speak during the chamber’s annual Economic Forecast Luncheon.
At the movies
Basu, who also lectures at Johns Hopkins University, used humor to make his relatively pessimistic forecast more palatable.
His presentation used 1980s movies. The overall title was “Back to the Future,” because he was to talk about the future and how to make it look like the better times. He used “The Big Chill” in reference to the recession.
He used “Ferris Bueller’s Day Off” to talk about unemployment, “except Ferris chose to take his day off,” Basu said.
When talking about the money investors had in the early part of the past decade, he made reference to the “lottery winner’s curse.”
“When we Americans get a lot of money, we don’t know how to spend it properly,” he said. “Just ask MC Hammer, Mike Tyson or Michael Jackson.”
Needs vs. wants
As for the state of the local economy, as well as its future, Basu had some positive news.
He noted Pennsylvania added about 19,000 jobs between July 2009 and July 2010, the most recent statistics available.
And he said the area’s labor market has been fairly flat over the past year.
“It’s not getting any worse,” he said. “But it’s not getting better.”
The positive is there is potential for change. States such as North Dakota and Nebraska, which produce a lot of America’s food, as well as Texas have unemployment rates about 5 percent or lower. Meanwhile, Nevada has record unemployment about 16 percent.
Why are some states doing better?
“Because they produce what we need, not what we want,” Basu said.
Pennsylvania has an advantage because it produces hardwood for lumber, but also is growing in the natural gas industry as energy companies tap the Marcellus Shale.
One thing the area should try to capitalize on is its existing resources in an effort to leverage jobs from the natural gas industry that is blowing up in the state’s northern tier.
The Valley has several universities that could begin to focus more on educating people to work in the industry, he said. There also are other opportunities to service those doing the drilling, but not have to deal locally with the environmental impact.
“I hear so many people say, ‘If only they’d put Marcellus Shale under our feet,’ ” he said. “I disagree. I’d rather be the lawyer or other professional serving those people rather than actually doing the drilling.”
Growth stalls
Some local business leaders who attended the luncheon said they enjoyed the presentation, but weren’t sure what the future might hold.
Garry Berfer, with Mifflinburg Bank and Trust, said his and other local banks are poised and ready to lend. However, there has been little growth in small business, and much of what the bank has seen are refinancing of existing debt, not new purchases.
He said many people are still “nervous.”
“We have a lot of good, stable banks locally,” he said. “We want to put our best foot forward.”
Richard Wible, president of R.E.W. Insurance & Financial Services LLC in Lewisburg, agreed with Basu’s assessment that there’s a one-in-two chance of another recession next year.
“I’ve been conservative for a while now,” he said. “There’s so much that’s unknown. I just focus on the short-term and take profit wherever you can.”
News
Related Photos
-
Anirban Basu, chairman and CEO of Sage Policy Group, a economic advisory company based in Baltimore, speaks at theGreater Susquehanna Valley Chamber of Commerce meeting on Thursday. Liz Rohde/The Daily Item
Discussion
Economist: Pennsylvania should be able to weather recession
- News
-
-
Raw milk remains popular, despite illnesses
WASHINGTON — The popularity of unpasteurized raw milk remains strong despite warnings from public health officials about its dangers and outbreaks of bacterial infections. In the latest case untreated contaminated milk from a Pennsylvania farm has sickened 38 people on the East Coast. It's a reminder of the risks of consuming milk bottled straight from the cow.
-
State Supreme Court explains legislative redistricting decision
HARRISBURG — The Pennsylvania Supreme Court today explained its reasons for rejecting the state's legislative redistricting plan last week, and a justice who disagreed with the ruling said this year's races will have to be held under the existing, decade-old maps.
-
Heinz Endowments fund Flight 93 oral histories
PITTSBURGH — A project to compile oral histories of those connected to the crash of hijacked United Airlines Flight 93 will continue for at least the next three years due to a $225,000 grant from The Heinz Endowments.
-
LARA looks ahead
LEWISBURG -- The Lewisburg Community Pool and spring and summer schedule of events are the big concerns these days for those running the Lewisburg Area Recreation Authority. Officials are confident they finally have the regional recreation authority's financial situation under control.
-
Wirth not first driver to face murder charge
LEWISBURG -- Christopher Wirth isn't the first person to face a third-degree murder charge in connection with a fatal crash in Union County. "A death involving a vehicle can support third-degree murder depending on the acts of the subject," District Attorney D. Peter Johnson said Thursday.
-
Bumpy ride for prison officers
SUNBURY -- It's been a rough week for two Northumberland County Prison commanders who were suspended without pay, had their wages reinstated, were laid off and then rehired. On Monday, Brian Wheary was suspended without pay from his $36,030-a-year position as commander. By Thursday, the 37-year-old was back on the job.
-
Reality TV star ready for visit
SHAMOKIN -- Ron Shirley has never been to Shamokin, has never been to the Valley at all, but he has an idea of what's waiting for him here. "The only thing I expect is to meet friendly, honest people," said Shirley, a star of the hit Tru TV reality series, "Lizard Lick Towing."
-
Masser to seek 2nd term
ELYSBURG -- State Rep. Kurt Masser, a Republican from Elysburg, announced Thursday that he will seek a second term representing the 107th Legislative District in the state House. "I am pleased to announce that I will be seeking a second term to represent the people of our area," he said. "We've accomplished a lot in our first term, but there is so much more to do. I want to keep being an independent voice for our community in Harrisburg."
-
West Milton man arraigned on robbery charges
A West Milton man is the second suspect in an armed robbery at a West Buffalo Township convenience store Saturday night. Michael Gulli, 41, of 310 Broad St., was arrested by Milton state police who said Gulli was involved in pointing a gun at two employees of the Forest Hill Store, on Buffalo Road, in Union County, and threatening to kill them.
-
Show guns for 1,500
LEWISBURG -- Hundreds of long rifles and other Colonial weapons that helped win the Revolutionary War and forge a nation will be on display -- and some, for sale -- today through Saturday at the fifth annual 18th Century Artisan Show.
-
VIDEO: Social media command center helps Super Bowl visitors
Indianapolis is the first Super Bowl host city to utilize the power of Twitter and other social media to help football fans get the most out of football's biggest event.
-
Tim Burns drops out of U.S. Senate race
HARRISBURG — An entrepreneur from southwestern Pennsylvania is dropping out of the race for U.S. Senate now that the Republican Party has endorsed another candidate.
- More News Headlines
-
