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Saturday, 5 April, 2008 0:29 AM
Michigan's Economy is in a 'mild recession', panel says
Photo credit: Jeff Kowalsky
Dana Johnson, Comerica Bank Chief Economist; Susan Tompor, Detroit Free Press Personal Finance Columnist; and Ron Humenny, President of Starfire Investment Advisers, Inc. News/Talk 760 WJR’s Paul W. Smith moderated a panel of experts and is pictured on the far right.
DETROIT -- In the world of economy, there is a difference between depression and recession. Depression is defined as everyone being out of a job as well as out of business. Recession, on the other hand, is where neighbors are out of work, but business is still going – yet it is slow. In other words, states Ron Humenny, recession is where both work employment and production is going down. “You hear people talking about being scared of the economy all the time,” Susan Tampour cites.
The Detroit Economic Club gave a “Tough Talk” to high school students and their sponsors, its members, and the media on early Thursday afternoon inside the MGM Grand Casino Hotel in downtown Detroit with the mission to prevent a depression in Michigan. Speakers included Tampour, finance columnist for the Detroit Free Press, Dana Johnson of Comerica Bank, and Humenny, who is the president of Starfire Investment Advisers, Inc. Moderated by Paul W. Smith and presided by Michael Fezzey, colleagues from 760 WJR Radio that has been friends for 20 years, the three gave “Straight Answers” on “How Michigan’s Economy Affects You”.
“Michigan’s economy is contracting slowly,” Johnson said. “What is happening is a mild recession.” There have been three reasons for the state’s recession: credit card debts, which according to Smith, paying them off is the most important thing to do. “What matters is developing a budget,” he said. The second is the restructuring of the automotive industry, in which General Motors is going small due to its foreign competitors such as Toyota. “Restructuring isn’t fun, but it is painful – and it must happen.” Smith continues. The third and last point is the increase rates of mortgages in housing, which may lead people to losing their homes. “Two problems investors make with their portfolios”, Humenny said, “is that they’re greedy and they make mistakes. You don’t make long-term decisions based on short-term decisions.”
High school students and several people in the audience were given the chance to ask the speakers questions on how Michigan can be prevented from going into the next Great Depression. For instance, why we shouldn’t be panic in this recession? “My husband and my boss,” Tampour answers, “tells me not to panic. Panicking won’t solver any problems, so have a game plan.” Like Tampour, Johnson is also optimistic that the economy will go up later this year and into the next. “There are people in terrible situations,” he said, “but our [Michigan’s] economy is resilient. Michigan’s going to start growing again next year.”
Other questions included how one can be prevented from leaving the state of Michigan. There is only a simple answer: it can’t be prevented. “People have the alternative of pursuing their career from another state,” Johnson said, “which is why unemployment rate in Michigan hasn’t gone up. You gotta believe in competition, which is what this economy is made of, and Michigan is part of it.”
For more information on upcoming meetings in Michigan and on how to be a member, go online at www.econclub.org.
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