ATLANTA - America will emerge in the second quarter of 2010 from its longest economic downturn since President Jimmy Carter's 1975 recession. But that will occur only if the government gets banks back lending money.
If that doesn't happen, all the stimulus in the world won't help.
That's the opinion of economist Rajeev Dhawan, director of the Georgia State University Economic Forecasting Center, which he gave at his quarterly forecast Feb. 25.
"The government's stimulus plan – the strength of which is debatable – will succeed only if the credit system is functioning on its own rather than on life support from the Federal Reserve," Dhawan told about 350 business people, Realtors and media at his conference.
He cautions against just throwing TARP money at the banks. They should be made to show they are solvent (not so-called zombie banks) and will be in a position to begin lending again. The trick is to get money circulating again and to provide credit availability.
The good news is that the Fed and the Treasury are sending signals this is part of the plan.
The bad news is Treasury Secretary Timothy Geithner's press conference to reveal the plans was woefully sketchy on details about how this would be done and sent an already spooked Wall Street off on another downward spiral.
"If the Treasury can put the specifics of the [recovery] plan on the table soon and give Wall Street the assurances it is looking for, then the recovery can begin to pick up steam. This is a big, big if. If the banks are not up and operating and the credit system working, all bets are off."
Right now, the trust in the financial system is gone, he said.
"Before, investors worried about the return on the investment. But now they are worried about the return of the investment," Dhawan said.
Retrenchment in American companies is the order of the day. Pull back and wait for the situation to get better.
Dhawan says investment is one of the best indicators of job growth and even stock market performance, but that just is not happening.
The public just isn't buying and so down the line, everyone is thinning inventory, laying off sales personnel, delivery people, factory workers and so it goes.
In Georgia, the economy is going to get worse before it gets better. A quarter million jobs will have disappeared in 2008 and 2009, before modest gains in employment start to turn the corner in the end of 2010. Nationwide, Dhawan predicts 4.5 million jobs will go nationwide before the recovery.
That loss of 143,000 Georgia jobs in '09 is projected against a total of 3.9 million jobs with 60 percent of them in the Atlanta area. That translates to 92,000 metro Atlantans looking for a job this year. Dhawan predicts unemployment will crack 10 percent before subsiding.
Statistics show the job loss will be across the board in manufacturing, construction, retail-trade, leisure-hospitality and even local governments, which are the largest employers in the state. Population growth has kept only health services and education on solid ground.
"The last recession in 2001-04, we saw job recovery was fast. This time job recovery will be slow," Dhawan said. "We should be proactive, optimistic but not pre-emptive. This is going to be slow and brutal.
"The fog of uncertainty is so great now, it is difficult to see beyond the next 30 days."
Wednesday, March 4, 2009
Economic turnaround by mid-'10, Dhawan says
Local dentist travels to Honduras to help others
Seth Gibree now has an entirely different outlook on the nation's economic downturn.
The metro area dentist recently returned from a trip to Honduras where he and a group worked for five days repairing and, in some cases, pulling teeth by the light of a truck's headlights under a pavilion deep into the trees. It was intense work, he said, sometimes working "literally nonstop" from 8 a.m. to 10:15 p.m.
Much of the work including fillings, about 600 total, and Gibree said so many fillings took time.
"Some of them were blown out with cavities so we had to rebuild them," he said. "It was exhausting work, but so spiritually rewarding."
During the five days of work, Gibree said word spread around the region. People made four-hour trips by bus, rode for miles on bicycles, or simply walked for hours.
Once they arrived, some patients waited the entire day until the sun had long since set.
"They were all so patient, so appreciative," he said. "I remember a lady and her kids waiting since 8 a.m. and it was pushing 9:15 p.m. She had stayed so long, she had no ride back home. We arranged to have guard take them back."
There was what Gibree described as an "emotional side" to the entire experience, an aspect that made him go that extra mile to help the people in need. Some left the dentist's chair weeping tears of joy.
"You sometimes felt you could do so much more," he said. "It's almost like we changed their lives when they realized we had come from a foreign country to give to them."
Gibree is also the father of two young sons, so seeing children in need especially tugged at his heartstrings. He remembers helping a six-year-old that "never made a sound or moved."
"We had to take all his upper teeth out," he said. "We had numbed him and he had never been numbed before, but he didn't move or cry. All he said was, 'gracias' while he bit down on cotton when we were done."
Moments like this made him want to try all the harder for the people, Gibree said.
"There were times I said I didn't care what it takes," he said. "I was going to make this look better than anything I had seen down there."
It was a trip of many firsts for Gibree. For one, he had never slept under machinegun-toting guards.
From 6 p.m. to 6 a.m., basically anytime the sun had set, guards carrying the machineguns were never far.
"It was pouring rain one night," he said. "You'd go outside and there they were. They'd work 12-hour shifts for $5.25."
When the five days came to an end, Gibree and company had seen 325 patients and made between 425 to 450 extractions. The grand total was more than $300,000 in dental work.
Seeing the faith of those people, Gibree said, strengthened his own faith.
"All the stuff we have here, whether it's our homes or whatever else," he said, "what is important is our families. I felt we did a really good thing there and changed a number of people's lives. It was 100 percent worth it."
Gibree said he was going to encourage colleagues and others to make the trip.
"It is so life changing," he said.
Anyone interested in how they can help can call 770-888-8282.
Alpharetta City Center plan gets warm welcome
ALPHARETTA - City residents got their first good look last week at the latest plans for the downtown City Center, a $69 million public-private development planned on property around City Hall, and they seemed pleased.
City Council chambers were nearly full as the city held the first of four public information meetings about the partnership between the city and the Solomon Group.
The project would feature a mix of retail shops, restaurants, offices and civic space overlooking a one-acre public square.
Bowing to public requests, this project won't include residential space, though surrounding properties might.
Private property owners of the strip center and homes south of the City Hall property aren't participating. Instead, the city took the project across Haynes Bridge Road to add a new downtown park.
City Council will vote on whether to pursue a $24.5 million bond referendum March 30 after the final meeting.
"We just need to hear from you what you think about the project," said Mayor Arthur Letchas.
Alpharetta would spend $12 million on a new city hall, fund part of the below-grade parking and pay for the town green and downtown park. Private investment would pick up about a third of the project's cost.
The remainder would come from Fulton County, if the new Alpharetta Library was built on property adjoining City Center.
Al Holbrook of the Solomon Group said the first phase, which would include the town green and one of the two commercial buildings flanking the new city hall, could come within 18 to 24 months of groundbreaking.
Before anything is done, city residents will have to approve the project in a citywide referendum.
"We have not yet decided to put this on the ballot in November," said Councilman David Belle Isle, who has led the project for the city.
Belle Isle said he preferred to start sooner rather than later, because the city could take advantage of the lowest interest rates in a generation and the lowest construction costs in a decade. In addition, the city's bond payments are about to decrease by 81 percent.
"This is an opportunity to get out in front of this economic situation," he said.
The city's debt payments will drop by $7 million annually starting in 2013, the same year payments would start for a City Center bond, estimated to be $1.8 million annually.
The city will save $6 million over 25 years by eliminating current leases on office space for the Community Development and Finance departments, said Finance Director Tom Harris.
"If we don't, we spend $6 million and have nothing to show for it in 25 years," Harris said. "What this means is this bond can be funded in our current tax structure without a tax increase.
Belle Isle said the city could even increase its budget by more than $5 million without raising taxes even with the City Center.
The savings over 30 years with some of the lowest interest and construction costs will pay for a third of the principal or more. Holbrook said now is the time to do it.
Holbrook's team, which includes eight companies, more than 20 specialists and principals with some 150 years of experience, are committed to the project and to the city.
Solmon Group has made more than seven different investments in land and buildings in downtown Alpharetta, and plans to move to City Center once it is built.
He said one company that needs almost 30,000 square feet of space expressed interest in relocating into the downtown project.
Taxpayers have approved bond issues in the past that have built fire stations, police headquarters, parks, Westside Parkway, intersections, municipal court and greenways, said City Administrator Bob Regus.
If the public supports the project on a November ballot, Regus said ground could be broken on City Center as early as April 2010.
"This is your city, this is your money. We are going to do it only if you want us to," Belle Isle said.
Alpharetta resident Scott Morrisey voiced his support of the project, as did Aaron Slattery, one of the partners in Slice Cafe and the soon-to-be opened Durty Kelly's Irish Pub on North Main Street.
Slattery was passionate in his support for the project and downtown Alpharetta.
"We need this project to happen. Many ventures started with the knowledge and hope of this project. Patience and savings accounts have kept these business owners downtown as they wait for it to happen," Slattery said. "Instead of thinking can we afford it, we should be thinking we cannot afford not to have it."
Tuesday, March 3, 2009
Forsyth holding town hall meeting tonight on Bethel Park
CUMMING - Forsyth County District 4 Commissioner Patrick Bell will hold a town hall meeting regarding Bethel Park Tuesday, March 3 at 6:30 p.m.
The meeting will be held at Chestatee Elementary School, located at 6945 Keith Bridge Road, Gainesville.
The meeting will provide attendees the opportunity to provide input and comments regarding Bethel Park.
All Forsyth County residents and any interested persons are invited and encouraged to attend.
We have a failure to communicate - and to lead
A long time ago when I was working at the Miami Herald and someone had really screwed up, I was there and watched the president of the newspaper at the time, Phil deMontmollin, slowly take in the situation for what seemed like an eternity.
It looked like he was getting ready to explode. When he finally looked up, he quietly and without emotion said, "What we have here is a failure to communicate."
No one said anything and that was all that he said before he turned and walked away. I remember that I was somehow involved in the issue at the time, and I will probably never forget the look on his face or the tone of his voice. You might say that it made an impression on me.
Something I read last week reminded me of that incident. And what I read made me think about President Obama's stimulus bill and the process we all just watched.
Votes in the House split 100 percent down party lines. Votes in the Senate split almost 100 percent down party lines. The vote to reconcile the House to the Senate bill split down party lines.
I don't know what to say. One side was in favor of a rescue and the other against one? Is now the time for the same old partisan politics?
This country - and the world for that matter - is in deep economic trouble right now, the worst trouble in almost a hundred years. And the "leadership" of this country, and I use the term loosely, votes down party lines on a bill that is supposed to prevent the worst case outcome. If that isn't important enough for the "leaders" on both sides to drop the partisanship, the gamesmanship, the posturing, and to for once, make the right decisions for the right reason, I don't know what is.
I keep asking myself if I am expecting too much from our congressional representatives and our senators. I want to think that neither side tried hard enough to find common ground.
I want to speculate that there was simply a lack of leadership - true leadership from both sides. Where are the real leaders? Who are they? Surely out of the whole lot there are one or two with enough backbone on both sides to lead this pack - this herd - in the direction of the greater good instead in the direction of lunacy. Surely.
Fareed Zakaria, in his recent book "The Post-American World," says, "The problem today is that the American political system seems to have lost its ability to create broad coalitions that solve complex issues."
He further goes on to say that our current political system "has been captured by money, special interests, a sensationalist media, and ideological attack groups. The result is ceaseless, virulent debate about trivia - politics as theater - and very little substance, compromise, and action."
He characterizes our current state as "a "can-do" country that is now saddled with a "do-nothing" political process designed for partisan battle rather than problem solving."
And I think he has unfortunately hit the nail squarely on it's head.
How has it come to this, and what is it going to take to fix it? I used to think that we had entered the Information Age, where more people than ever before had more access to more information then any other time in the history of the world. And that this was a good thing.
I thought that with more complete information that we would make better decisions. But it doesn't seem to be working that way and, in fact, it seems that it is having the opposite effect. It feels like we have become so overwhelmed with information from so many venues that our capacity to make good decisions has been diminished.
President Obama has stated that the partisanship in our political process needs to end - that we need to focus on finding common ground with each other and on making collective and productive decisions.
My hope is that he stays this course until people start to believe that it is in fact possible and that it is also necessary and in our individual and collective best interest. It's an ambitions goal but a worthy one - and our future depends on it. But our time is not unlimited and I hope we wake up before it's too late.
Alpharetta picks Sewczwicz as director of Engineering
After reviewing more than 70 applicants, Alpharetta stuck close to home to select its new director of Engineering/Public Works. Pete Sewczwicz got to remove the "interim" from in front of his title, taking on the role permanently.
Sewczwicz replaces the late John Moskaluk, Ph.D., who brought the department from one engineer - himself - to at least a half dozen certified engineers.
Public Works, trees and transportation are among the responsibilities of the department.
Forsyth names Derrer finalist for county manager post
CUMMING - Doug Derrer has been named the sole finalist for the Forsyth County manager's position by the Board of Commissioners.
Derrer has served as interim county manager since September 2008. He joined Forsyth County as deputy county manager in February 2008. He brings more than 28 years of local government experience to Forsyth County.
Prior to joining Forsyth County, Derrer served as the public works director for Hall County. He has also worked as the public safety director for Hall County, the supervisor for the Hall County Code Enforcement Department, the city manager for Flowery Branch, and a police officer for Miami-Dade County in Florida. He holds Bachelor of Science degrees in public administration and criminal justice.
Responsibilities of the county manager position:
The county manager provides leadership for Forsyth County government by working with the Board of Commissioners and other management to establish long-range goals, strategies, plans and policies; supervises the county's administrative offices and senior management; oversees county programs/activities; interprets county goals/policies; and ensures county administration and senior management are making decisions consistent with the Board of Commissioners' planning and policy initiatives.
