January 1, 2009
The Financial Market
The economic crisis including the housing market, budget cuts, and government spending is discussed in relation to the state of Indiana.Watch Video »View Article
With the passage of the federal economic stimulus package the state of Indiana may receive as much as $5 billion. According to Dr. Jerry Conover, director of Indiana Business Research Center, this could “go a long way towards stimulating jobs and towards providing relief to groups that could really use it.”
Yet state representative, Peggy Welch (D) explains that the state of Indiana cannot solely depend on that money. She states that the state of Indiana, “cannot base the budget that we’re going to be writing for the next two years on what we think we‘re going to be getting. We have to base our budget on what we know that we have.”
In proof that the economic crisis has affected many individuals, Mark Zuckerberg, a bankruptcy attorney, explains that he has seen a rise in the individuals filing for bankruptcy. He explains that this trend is due in part to one area in particular. “If I had to pick a sector of the type of people that are coming in to see me, I’d would say it’s anybody related to the housing market…such as roofers and builders,” says Zuckerberg. Those filing for bankruptcy may be getting some help with a new law that could be passed to allow a person to modify their first mortgage when they file.
Understanding the current housing market, the state of Indiana has made strides to help those in financial need. Recent legislation was passed to provide an outlet for individuals in need to call and receive advice, counseling and answers to some of their questions.
But the housing market isn’t the only crisis affecting the nation, and the state of Indiana. The recent unemployment rates show that the state has suffered a significant loss in jobs. “That has thrown a wrench into the revenue projections for the state,” says Dr. Conover. “Here in Indiana, we’re at a level of unemployment that we haven’t seen for decades.”
And in light of cutting of government spending in the state, Welch notes that the economy is effecting all areas including “libraries, streets, services like fire and police, things that we depend on.“ However, she assures that the state will, “make sure that we’re keeping those things are really providing the best service for the citizens.”
The Bloomington Market
The local Bloomington economy and market may not be facing such hardships as the rest of the state with a better housing market and business environment.Watch Video »View Article
While the state of Indiana is feeling the current economic condition, Monroe County, specifically Bloomington, may not be hurting as much as the rest of the state. “We are fortunate. . .It’s due a lot to Cook and I.U. and the life sciences environment we have here and the technology environment,” says Jeremy Sowders, Vice President of Development of Bloomington Economic Development Corporation.
More good news was also announce for Bloomington as the GE plant said that it would remain open at least until the first quarter of 2010. This means more people will reach full employment retirement. “We’re going to stay optimistic. You never know, they may stay open for several more years,” says Sowder.
Some more hope may be seen as realtors in Indiana shared with the state house that the months of December and January were not as bad as in the past couple of months. Yet this may be caused by the low interest rates due to the high amount of foreclosures.
The housing market has led to a domino effect on the economy. Mitch Frazier, Director of Media Relations for the Indiana Economic Development Center explains that consumers are over extended with their homes, which in turn effects the credit markets as the consumers can not pay and therefore the credit market crumbles. Then businesses have no ability to access that capital. “It’s a challenge that you can’t separate out between business and the consumer and the home. It’s the entire economy,” Frazier says.
Recent numbers show that Indiana’s unemployment rates have skyrocketed past the national average, at 8.2%. These unemployment numbers raise the problem with Indiana’s unemployment trust fund that is bankrupt. Rebuilding this trust fund proves to be a challenge. According to Sowders, “There is funding to buffer the losses in the unemployment trust fund, but we have a structural deficit that has roots from many, many years ago.”
Hopefully the unemployment rate in Indiana will begin to mirror the business environment of the state. Indiana is said to have an unmatched business environment and is considered one of the most improved states for business. This ensures that there is some hope for Indiana’s market.
Sowders concludes, “The important thing is that we have to continue to have the best environment. We face some challenges on the unemployment side, but we have to do everything we can now in a down economy to ensure we emerge out of this stronger than we ever came into it.”
Tags: Bloomington Economic Development Corporation, Cook, housing market, Indiana Economic Development Corporation, Indiana unemployment, Jeremy Sowders, Mitch Frazier, Peggy Welch, unemployment trust fund
Indiana’s Auto and Industry
Indiana’s automotive market and industry are debated as well as the bailout and the future outlook of the economic market.Watch Video »View Article
Unlike Bloomington in Monroe County, several Indiana counties are feeling the strong effects of the economic crisis including Kokomo in Howard County. Much of this stems from the Chrysler and Delphi plants in Kokomo that employ almost 8,000 people combined. Kokomo‘s mayor, Greg Goodnight explains, “Indiana has historically a strong manufacturing base and a lot of that in the north central part of the state is tied to the automotive industry. . .Unfortunately because of the downturn, it’s effecting us dramatically here.”
But Kokomo has received some potential good news, with the recent partnership of Chrysler and Fiat. “We believe that the partnership with Fiat will hopefully stabilize Chrysler’s situation . . .and will make sure that Kokomo is a part of their long term plan,” says Mayor Goodnight.
These auto makers have face significant challenges in obtaining bailout money compared to the banking bailouts. Dr. Conover, director of the Indiana Business Research Center states, “The money to the financial sectors didn’t require a whole lot of a plan as to how they were going to deploy those funds. Whereas the auto industry had to do a lot more.” This is perhaps due to the public’s negative feelings towards to banking bailout after funds were not wisely distributed.
The bailout will certainly affect Indiana. Mitch Frazier, Director of Media Relations for the Indiana Economic Development Center explains that there is much Indiana must pull together to figure out a plan to capture this federal money. He emphasizes that the state must plan how to “best use those dollars for long term economic return.”
This bailout may help with the economic conditions, but there is no definite prediction for how long the current situation may last. Dr. Conover states that, “it’s a constantly moving target.” Several studies estimate there may be a turnaround as early as later this year to lasting into 2011.
However, even though employment may start to rise and the economy may grow, according to Dr. Conover, “it’s going to take a lot longer to get back to where we were.” And there’s little doubt that the effects from this crisis will last for a long time.