News Release

Recession: Now What?


In the wake of the announcement by a panel of academic experts that the U.S. economy has been in a recession since March, the following analysts are available for interviews:

An economist based in Washington, D.C., Malveaux said today: “It’s not news to anyone that we’re in a recession — most people are already experiencing it, so they don’t need an economist to tell them that. But certain communities are feeling it more than others. In October, the general unemployment rate increased by a half point, but by a full point for African Americans. Most states and cities are prohibited from deficit spending, so it’s people in cities — who tend to be more black, brown, older and poorer — who suffer more since they rely on states and cities to provide services. After 9-11, it’s often been said that we’re all in the same boat. If that’s true, some are riding and some are rowing.”
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Professor of economics at the University of Massachusetts Boston, Albelda said today: “States are cutting a lot of their budgets — education, healthcare, mental health services. For example, the Massachusetts legislature last week passed a budget which cut half of state funds to adult literacy programs for this year. If the federal government really wanted a stimulus package, it would help the states to provide these needed services since 49 states are prohibited from running a deficit. The states have been giving tax cuts during the boom and now they’re cutting to the bone.”
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Professor of economic history at Villanova University, Schweitzer is author of the book Custom and Contract. She said today: “What does the administration mean by ‘stimulus’ — where do they get the concept that tax breaks for a few large corporations will make things better? Tax cuts are talked about as if there’s only one kind. There are different ways to ‘stimulate’ the economy. It used to be thought that economic growth came from building factories. However, for at least a generation it has been understood by economic historians that the best way to stimulate economic growth is education. The best way to achieve long-term growth is to educate the public. Education leads to innovation and innovation leads to growth. We’re seeing an increase in the already alarming gap between the richest and poorest in this country, we’re losing our middle class. To the public, a good economy is a middle class economy — jobs that provide a reasonable wage and give people time to spend with their children. Instead, the public is being offered jobs at six dollars an hour with no benefits. For example, if we hire more teachers and nurses the public will be better off and we would create a larger middle class. Consumers then decide what they’re going to spend their money on, and that will determine the corporate winners and losers. The administration wants to pick the winners and losers by giving select companies tax breaks.”
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For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; David Zupan, (541) 484-9167