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LIMBA-Dr Pearl Kamer at Farmingdale College, Knapp Hall
January 27, 2012 @ 12:00 am EST
Today’s experience at LIMBA was not only an opportunity to learn more about Long Island, it was also an opportunity for students to see what we do at LIMBA. This meeting was held on the Farmingdale Campus in the University Club. The students in the room were encouraged to participate in the Q&A portion and they did, enthusiastically.
Dr Pearl Kamer, Chief Economist for the Long Island Association and President of the Farmingdale College Council was our speaker this morning.
Pearl began with optimistic news about the national economy. The percentage of those without jobs has gone down. The number of people counted among the unemployed had gone down nationwide. The operative word here is "counted". We no longer count those people who have surrendered and are no longer looking for work. In addition to that we give equal status of a job that pays half as much as another job lost the same weight. So if you lose 1,000 jobs averaging $70,000 and replace those 1.000 jobs with ones that average $35,000 your stats will look the same, but the effect on the economy will be significantly different. It gets worse; part time work is also included. In other words we are getting slightly better, but we are not "out of the woods"
Dr Kamer addressed the European sovereign risk problem. She is wary of the ill effects of another European collapse. It could happen that there may be trouble ahead
She then spoke about the housing crises. She covered the causes. Banks made obtaining a mortgage insanely easy, and borrowers were irresponsible and unrealistic about their ability to pay. The overhang of foreclosures continue largely because banks are unwilling to make those reductions of principal that would facilitate some people staying in their homes. Others that are in even worse financial shape, couldn’t hold on to their homes no matter how accommodating the bank became. So the slough out will be long and costly to the society in general. Home values on ALL homes will remain weak during this readjustment.
Manufacturing was another issue handled by the speaker. Manufacturing has been in a long decline for about 5 decades and now comprises about 10% of the national GDP. That could rise with the advent of highly specialized manufacturing. The vocational schools and community colleges are already teaching many of the skills that will be needed. Again education is a long-term commitment with a long-term pay-off.
When we wrapped up the session the students understood the concept of shaping public policy by participating in the discussion with policy makers. The conversation around the room after the meeting convinced me that this was a worthy experiment. Dr Keen, Farmingdale’s president, participated in the program and he agreed.