Shelby DeHaven, ‘Doah Managing Editor
February 12, 2014
President of the Federal Reserve Bank of Richmond, Jeffrey Lacker, visited campus on Feb. 4, 2014 to speak to Winchester community and S.U. students.
The audience consisted of members of the banking community, S.U. faculty and staff, students and special guests, like Thomas Byrd.
Lacker made a general presentation in which in made his economic prediction for this year and then had a special session with students from the Harry F. Byrd Jr. School of Business.
Lacker explained how the United States went through a period of “Great Moderation.”
During the period between 1983 and 22007, “real GDP grew at an average annual rate of 3.3 percent. Over that 24-year period, we experienced two short, shallow recessions that together lasted just five quarters. Real personal income kept pace with GDP… and consumer spending advanced even more rapidly than income.”
Lacker explained in his speech. Between 2008 and 2009, the Great Recession changed the economic landscape of the United States drastically.
“During the Great Recession, GDP fell 4.3 percent over a six-quarter interval, but other indicators documents even greater hardship. Payroll employment fell by 8.7 million jobs in the recession and its immediate aftermath.”
“The unemployment rate, which was below 5 percent in 2007, rose to 10 percent in October 2009. Real personal income fell by 3.1 percent from December 2007 to July 2009… The scale and scope of the loss in income and wealth experienced by Americans was far greater than anything they had seen in the previous 20 years.”
Lacker described the rebound and the predicted changes that are to expected to happen throughout the year.
Over the past few years, consumer spending has increased. Small businesses are slowly recovering but are fighting many difficulties due to “government regulations and red tape.”
Lacker’s “fear is that the recent decline in the federal deficit will dampen the sense of urgency about fixing the longer-run budgetary imbalance.
The sooner we resolve uncertainty about how the costs of those fixes will be allocated, the better off we will be.”
It will be a waiting game to see if President Lacker’s predicts will come true but he stressed the reasons why he came to speak to the students.
He explains that college is a critical time in students lives. The economy is very challenging and students need to understand.
He also commented that it may be disappointing to find a place after college.
But he assured them that there are opportunities out there and that skills are important.
He left with the message for students to get good at learning.