With the election of a new president, many Americans hope the economy will begin to improve. Please note: If you do not want your hopes for a quick economic recovery to be dashed, do not read further!
In the 2008 presidential election, nearly two-thirds of 18- to 29-year-old voters voted for President-elect Barack Obama. Of the total number of people who cast ballots, six of 10 — the majority of whom supported Obama — said the economy was the number one issue in determining for whom they voted.. Indeed, with the election of a new administration will come new economic policies and a renewed focus on aiding America’s teetering manufacturing base, especially the auto industry.
Yet despite these changes, the American economy likely will remain mired in the deepest recession since the 1980s — and possibly the 1930s — until well into 2009. Just last Friday, the U.S. Department of Labor reported that 240,000 Americans lost their jobs in October, bringing unemployment to the highest level in 14 years. Economists from PNC Financial Services Group expect such monthly job losses to become the norm for at least the next six months. By the end of next year, unemployment may reach 8 percent, a number not seen since the early 1980s — before many of us were born. The International Monetary Fund predicts that the economies of all developed nations will experience a full-year contraction for the first time since World War II.
For college students like us, this downturn may be especially painful. Having become used to the idea of easily getting a job after college, we may find that fewer employers are hiring and that the salaries are not as high as we had hoped. Furthermore, college expenses are likely to increase. Public and private universities across the nation have become strapped for cash. Many schools, such as Tufts University in Boston and the University of Florida, have cut back on spending. Entire university systems, such as those for the states of California and Massachusetts, are facing budget shortfalls. Inevitably, some universities will pass these costs onto students by increasing the cost of tuition or room and board. Also, many schools are revising their merit and need-based financial aid programs. Hopefully, the new administration will begin considering programs to aid educational institutions and new college graduates throughout the next year.
Obama has assembled an impressive economic team, including Paul Volcker, former chairman of the U.S. Federal Reserve, and former Treasury Secretary Lawrence Summers. Even with advice and guidance from this team, however, the government can at most institute programs that will mitigate the effects of recession. This administration will be facing the potential bankruptcy of one, two or all three of Detroit’s Big Three auto manufacturers. General Motors, for example, does not believe it will have enough cash to survive through 2009. To save thousands or even millions of jobs, some type of government assistance will be necessary. Furthermore, Obama has pledged to work with U.S. Congress to pass economic stimulus packages of $60 to $100 billion. Given the severity of the crisis, these packages may have little effect. In reality, any presidential administration would have limited options in this environment.
Still, as this economic crisis worsens, stay motivated. Jobs may become scarce and the cost of tuition may rise, but that should not inhibit anyone from finishing up college, applying to graduate school or looking for a new job. Most importantly, do not be disappointed if the economy doesn’t bounce back as quickly as you thought it would. If history is any guide, once the economy does rebound, we will all have more than enough career and educational opportunities to choose from.
Andrew’s column runs biweekly Thursdays. He can be reached at a.golden@cavalierdaily.com.
Read More
It’s okay not to be okay
By Mai Hukuoka | 6 days agoWhether talking to a friend, a loved one or a professional, it is so necessary, and human, to need more than you can provide for yourself.
Taking a break at Tangerines Kitchen
By Charley Thomas | January 6, 2025What the restaurant somewhat lacks in ambiance, it compensates for in tasty dishes and prompt service.
Virginia Policy Lab — a hub for student-led policy action
By Katherine Haden | December 9, 2024Students propose their own projects and collaborate with other members to research their issues of interest, brainstorm solutions and write policy proposals.
