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<< Previous   of   Next >> (click to enlarge) Rep. Rick Larsen, D-Wash.   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Friday, November 13, 2009 Economic forecast: Recovery will be slow By Mike Benbow Herald Writer EVERETT — This time, we won’t buy ourselves out of the recession. That’s the word from Western Washington University economist Hart Hodges, who said Thursday that the recession’s recovery will take much longer than usual. “The recovery will be a slow ride out, not a rapid bounce back,” said Hodges, director of the Center for Economic and Business Research at WWU. Hodges joined Rep. Rick Larsen, D-Wash., at an economic forecast luncheon sponsored by the Everett Area Chamber of Commerce. He noted that in 2001, businesses quit spending, but consumers didn’t stop, so we did buy ourselves back into prosperity. This time around, neither businesses nor consumers are spending. And more importantly, businesses are expected to be very slow in hiring people back, Hodges said. “Permanent layoffs are much higher than normal,” he said. “People are not expecting to get their old jobs back as much as in previous recessions.” Hodges said the county’s economy is similar to the state’s. He noted that the state expects to continue to see high unemployment and to lose jobs through next year. We’re not likely to see job growth until 2011, he added. The reason is that there’s no big driver of the economy to pull us out of the mire, he said. “We’ll be fine several years out,” he added. “But the adjustment period is going to be very uncomfortable and will be years.” Larsen noted that exports play a strong role in the state’s economy and that one bit of good news is that many of our trading partners, such as China, are now pulling out of the recession. In the short term, he said, government will continue to try to help. But he said that in the long term, it will have to work hard to reduce the deficit and do something about government spending. Asked about the Boeing Co.’s decision to put a second 787 line in South Carolina, Larsen said the state made a good business case for the line to be located here. He said he was reminded of a situation in the television show “The Simpsons” where Homer is strangling his son Bart, who asks him why. “Homer says, ‘In times of crisis, you go with what you know,’” Larsen said. “I think there should be fewer hand wringers and more neck wringers. You do what you can do.” Larsen said that means continuing to invest in the state’s education system and doing other things to show we’re the best place for business investments. Hodges agreed. “You shake Bart pretty hard,” he said. “You show we’re the best. Let’s work with our (aerospace) parts suppliers and make South Carolina buy its parts here.” Hodges said one key to the county’s recovery will be how quickly its housing market recovers. “It’s very, very important,” he said, noting that construction jobs pay well and have a “very high ripple effect” on the economy. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

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