Wednesday March 18 | North Carolina Economic Forecast

March 17, 2009 at 1:20 pm | Posted in Coming Up | 11 Comments

UNC Charlotte Economics Professor John Connaughton shares his predictions for the state’s economy with his latest economic forecast, issued quarterly. Lately the news hasn’t been good; we’ll find out if his predictions from last quarter were true, and see what’s to come.
Dr. John Connaughton – Professor of Economics, UNC Charlotte

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  1. Your guest is wrong about Carter. First he never used the term malaise. Second the energy programs he put in place were very successful. They reduced our per capital energy use drastically. Carter’s policies were very effective and would have continued to be so had Reagan not dismantled them, putting us back on our energy guzzling ways. That is why we use so much more energy per person than do people in places like Europe.

  2. What suggestions for economics education in the area does Mr. Connaughton have for displaced, financial markets professionals? I searched the uncc course catalog and the spring semester is almost over; are there any micro courses or summer classes that you can recommend?

  3. I noticed that Dr. C’s report shows actual growth in services and government. Can he expand on that — which industries in particular? Personally, I have argued that much of this is market adjustment, especially employment where losses today in some areas will soon (in next year) be offset by growth in other areas?


  5. What about credit card debt? I know in the 80’s my parents were maxed out, but with only 2 credit cards. Today, most people have several cards with LOTS of debt, and interest rates climbing rapidly. I think people are in serious reset mode, and won’t for awhile return to the spending spree.

  6. Carter may not have used the word “malaise” but his 1979 speech about the loss of confidence and impact of expectations on economy, came to be known as the Malaise Speech.

  7. I have previously maligned Dr. Connaughton in CT blog comments so I listened carefully and hesitated to comment this morning. His last report underestimated our recent level of unemployment and minimized the NC downturn. This quarter he is saying (March 17) that the economy will be in recovery by the end of summer (18mos.) 2010. He presented on Charlotte Talks that he is sure larger American banks are solvent and that this is mainly a crisis of confidence hardly worse than the mid-1970s or early 1980s. Even when confronted with the assessment of globalist freetrader New York Times columnist Thomas L. Friedman (TOTN yesterday- “Hot, Flat and Crowded”) he asserted that growth and credit will soon be restored, though he said the housing and construction markets will take some time to come back and and that unemployment will go higher before it abates. Connaughton totally denies that the global economy is appreciably altered, that the US standing in the world has been changed or that the effects of civil conflict or unstable weather from climate change will have any appreciable effect. If he wished to reassure and calm the audience he made a good effort, but he was dishonest.

    I decided to comment for 4 reasons:
    1. Mike Collins is not in a position to be confrontive and would be accused as a naysayer if he spoke first without listener demand. It becomes the task of listeners to critique guests. He is a little below the standards of Neil Conan who confronted Friedman on his free trader and pro-Israel stances yesterday.
    2. My research convinces me that this is a crisis of credit, polarization of wealth and income, lack of transparency and capitalist contradictions, and not a crisis of confidence. It is in short the crisis Warren Buffet describes when he says:“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” But it is also the companion crisis of the exhausted environment that Thomas Friedman recognizes. We are truly in trouble and things can never be the same again. It will be fruitless for our country to engage in a “war to the bottom” over scarce resources and worsening conditions: We lack that kind of power.
    3. Inflation is already appearing in government statistics even as growth and spending fall. The core rate of the cost of living continues to rise despite the supposed retail price cutting, and gasoline and food are also going steadily up. Maybe this is monetary inflation from creating bailout money?
    4. I talked with my grocery store manager this morning and his anxiety was fueled from actual recent and impending layoffs in a variety of sectors right in our community. It seems as if every employer has taken this opportunity or is being forced by reduced business to cut back.

    My assessment of Dr. Connaughton’s mission is that he is lying to quell civil unrest and revolutionary demands for change. In this way he is the very definition of stogy. I pity the economics students who suffer him and his colleague, deregulation advocate Tony Plath. Maybe they have been brainwashed by their recycled lecture notes, or maybe they are in service to the privileged class as Ravi Batra asserts most economists are. Had I called in I would have asked Connaughton to comment of the work of Michael Hudson who thinks most of our big financial institutions are “zombie banks,” though I suspect he would have brushed this off.

    I was astounded by the political contradiction he presented: That US Presidents have no control over the economy; while the bailout is a good thing that will help and the stimulus is not. How can a doctorate holder talk this way? And while gas shortages alone in the past have stalled our economy; that mass poverty and natural crises will have little effect on it now. I’ll lump him with the “ghost dancers” whose religion is corporate capitalism under global free trade, and whose prayers (commentaries) are for the restoration of the securitized and derivative schemes that caused this meltdown.

    Bubble economies are not good for working people and we deserve better. We also deserve to be told the truth about where our bailout money is going and how much (Connaughton was mum about trillions of “future dollars” in domestic and foreign bank loans by the FED, in addition to the Treasury money (TARP).) And we deserve to be told the truth about our environment so that we can make rational adjustments in consumption and lifestyles to save ourselves. Large populations overseas are already threatening their governments because food is so expensive, jobs so scarce, the wealthy class so selfish and corrupt and currency increasingly worthless.

    A pal in the car parts store, a professed conservative, told me this morning that most customers agree with him that this Depression was planned for social control purposes, and that they are beginning to suspect 9/11 was an inside job. This fella has been level-headed and quiet in the past, but now he is agitated. As a person with a more humane social agenda (contrary to his individualism) I believe I speak for him too when it comes to skepticism and suspicion.

  8. P.S. I wonder how your butt would look if you kept eating a bigger piece of pie more often as time went on, John Connaughton. Economic activity will not create more of exhaustible resources or clean our air and water or cool out atmosphere. So far it has tended increasingly to do just the opposite. (Say “huh?” Gregg Smith, if you’re not too busy making money.)

  9. “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.” – Rahm Emanuel

  10. These economists and government officials are blatantly lying about the unemployment rate…

    They report the rate at 8.1% nationally, but in actuality it is actually double that, at least 15% and rising, probably close to 20% now. Some areas of the United States (some urban areas and rural areas) have already shot way past the 20% unemployment rate and might actually be closer to 30%.

    They keep using the bogus U3 level of unemployment from the Bureau of Labor Statistic when the U6 level is closer to reality; also, underemployment is a huge issue, with many people forced to work part-time when they would rather be working full-time.

    The more these officials keep ignoring the harsh reality of the horrible employment situation in America the longer this crisis will drag on.

  11. Eman: I don’t know about your specific estimates of unemployment but it is obviously higher than official figures. This is partly because of purposeful definitions and partly because of gray market, contract and self-employment which are also being decimated. A big fraction of those out of work do not qualify for benefits. Others’ eligibility expires as time passes. I live the part time thing. Informal employment is becoming saturated. How many day laborers and helpers can the still employed pay? People have less self-reliance and less recourse to family farms than in the last Great Depression. I see increased dumpster diving and desperate petty crime.
    People in Walmart get shabbier and sicker looking every week. (I don’t shop there, I only observe.)

    Thanks for your kind reply, Gregg. That quote was only repeated by chief of staff Emmanuel, not originated by him. Nothing, it seems, is original with the Obama regime. I take it in a “Shock Doctrine” (Naomi Klein) context.

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