Denton Record Chronicle
02:06 AM CDT on Sunday, September 21, 2008
By Candace Carlisle and Dawn Cobb / Staff Writers
As the numbers of foreclosures and unemployed workers rise across the nation, the economic blow to Denton County continues to remain soft in comparison. The somewhat optimistic local financial forecast is likely caused by the composition of the city of Denton and Denton County, said Dr. Bernard Weinstein, director of the University of North Texas Economic Development and Research Center.
“The United States’ economy is slipping into a recession, but Denton County is different,” Weinstein said. “For the next six months, the city of Denton and Denton County is recessionproof.”
The two universities, county government and state school help insulate the county from the shellshocked business environment that has corroded economies elsewhere in the nation, he explained.And those few industries that have experienced job growth despite nationwide job cuts — such as education, government and health care — all have a home in Denton and throughout the North Texas area, said Weinstein.
“But there will be no growth like what we experienced in ’07 or the first half of ’08, because we are in a period of economic contraction,” Weinstein said.
That economic contraction is reflected in the rising national unemployment rates and foreclosure numbers as well as on Wall Street. In the past week, stocks have plummeted as major lenders have crumbled — declaring bankruptcy, being sold or seeking government assistance to cover major debts. The situation has sent stock market indexes on a roller-coaster ride, significantly down one day and up 300 points or more the next. The unsteadiness in the financial markets has some concerned, though more on a national scale than locally.
“The markets we’re in are very much like what we encountered in the ’60s and ’70s,” said Sennett Kirk, owner of Kirk Securities in Denton. “It looks like to me that we are in a long period where we are correcting for that long-term bear market. “Again, I think we are not to the end of it,” he added.
He suggests stockholders should hold steady and not panic, despite the headline-grabbing news as Wall Street continues to grapple with the significant changes believed to have been sparked
by the subprime mortgage-lending crisis that has sent foreclosures skyrocketing across the U.S. “For people looking to buy, I would wait on that,” Kirk said.
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Bernanke: U.S. slump may drag down Texas economy
By CLAY ROBISON Copyright 2008 Houston Chronicle Austin Bureau
Dec. 1, 2008, 11:06PM
He predicted that recent intervention by the federal government, including the $700 billion bailout of private companies, will help restore confidence in the financial system and eventually lead to economic recovery.
Bernanke, in an address to the Austin Chamber of Commerce, also said additional interest-rate cuts were “certainly feasible” but noted the Fed’s key interest rate, already at 1 percent following a series of earlier reductions, can’t go much lower.
“At this point the scope for using conventional interest rate policies to support the economy is obviously limited,” he said.
Gov. Rick Perry, who met with Bernanke before his speech, also praised the Texas economy. But he, too, cautioned the business leaders that rougher times may be ahead.
“The fact is we’re not an island. Our economy is interlaced with the other 49 states,” he said. “We’re certainly starting to feel the effects of this meltdown, and we expect that they will increase.”
Heavy hand of government
Perry said 250,000 new jobs were created in Texas between October 2007 and October 2008, while 500,000 jobs were being lost in the United States.
But the unemployment rate in Texas, while still almost a full percentage point lower than the national rate, has been rising in recent months. Seasonally adjusted, it was 5.6 percent in Texas in October, up from 4.7 percent in July.
The U.S. unemployment rate in October was 6.5 percent, compared with 5.7 percent in July.
Perry spokesman Mark Miner said the governor met privately with Bernanke and Richard Fisher, president and CEO of the Federal Reserve Bank of Dallas.
Miner said he couldn’t comment on their discussion but said that Perry still opposes the huge financial bailout, a major part of the federal government’s economic intervention.
Perry, who credits lower taxes and a relaxed regulatory climate for Texas’ healthier economy, told the chamber luncheon that businesses “do their best when the heavy hand of government is off their backs and out of their pockets.”
‘Financial turbulence’
Bernanke said he agreed that governments should “intervene in markets only in exceptional circumstances.”
“However, in my view, the failure of a major financial institution at a time when financial markets are already quite fragile poses too great a threat to financial and economic stability to be ignored,” he said. “In such cases, intervention is necessary to protect the public interest.”
In his speech, Bernanke didn’t mention an announcement by the National Bureau of Economic Research, made earlier in the day, that the U.S. economy has been in a recession since December 2007. But, he noted, “This extraordinary period of financial turbulence is now well into its second year.”
Recovery won’t be easy, he added, “but I believe that the policy responses taken (in the United States) and by our international partners, together with the underlying vitality and resilience of the American economy, will help to restore confidence in our financial system and place our economy back on the path to vigorous growth.”
Perry travels to Philadelphia today to join other governors for a discussion of the economic crisis with President-elect Barack Obama and Vice President-elect Joe Biden.
Composition cushions economic blow: Officials, business owners and professors say
city and county buffered by unique conditions
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