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Darton professor pessimistic about Obamacare outcome

Darton State College assistant professor of economics Aaron Johnson (right) speaks with Dougherty County Kiwanian Ben Clenney. (Special Photo: David Shivers)

Darton State College assistant professor of economics Aaron Johnson (right) speaks with Dougherty County Kiwanian Ben Clenney. (Special Photo: David Shivers)

ALBANY — Darton State College economist Aaron Johnson offered a cautiously optimistic outlook for the national, state, and local economies in a recent appearance before the Kiwanis Club of Dougherty County.

Johnson is an assistant professor of economics at Darton and the school’s designated spokesman on economic issues. He also serves on the Albany-Dougherty County Economic Development Commission and the Albany Area Chamber of Commerce Small Business Resource Committee.

On both the state and national economies, Johnson said, “I think we are at a critical time here, to where we can either continue upward movement or we can dip back into recession. The United States and Georgia are still in a recovery phase, but obviously the recovery has been pretty tepid.”

Congressional gridlock concerns him, he said, noting the government’s spending and borrowing habits. “There comes a place and time when you’ve got to pay back that debt. The way things are today, there’s no way we’re going to be able to pay that off without raising taxes, without cutting government spending,” both of which he added are “detrimental to the economic side.”

“Yes, we reached an agreement to fund the government and raise the debt ceiling, but unfortunately we are going to have to come back to that in January,” Johnson said, adding that the impasse impacts consumer confidence, financial markets, job creation, and the ability to buy various consumer goods.

Still, Johnson offered some encouragement. “The economy has been resilient,” he said. “When you think about all the crises that have taken place worldwide, Europe and the cash situation there, when you think about weather conditions, about Congressional gridlock, yet we have still remained resilient…that’s something to be encouraged about.”

The housing situation is improving, he added, with more purchases and rising prices, plus “when people buy a house they’ve got to make improvements, right? So you’re thinking furnishings, new appliances, and that’s all a driver of economic growth and something we look at when determining whether the economy is growing.”

Globally, the United States is the leader in economic growth at 2.2 percent, which Johnson acknowledged doesn’t sound that great when the historic average is 3 percent. However, the nation is leading Canada and Japan. Using a metaphor from college athletics, Johnson discounted China and India, he said, because “they are developing nations. They’re what I call Division 3. We’re Division 1. You can’t compare, we’re at different levels.

Georgia has been a leader in the Southeastern United States at 2.3 percent growth. Second was South Carolina at 1.9 percent, while neighboring Alabama is at 0.7 percent.

The number of foreclosures in the Atlanta area has been major factor in Georgia’s struggle, but that is starting to improve. Johnson also credited the Georgia Legislature for incentives being offered to attract business to the state.

Looking at Albany, Johnson said the job growth rate here has not increased but has remained stable. “We still have major players, the Marine Corps base, Miller-Coors, Procter & Gamble, so that is a positive.

A potential “game-changer” for Albany is the “Deal Closing Fund”, $30 million recently set aside by the city commission’s Long-Term Financial Planning Committee to offer incentives for prospective businesses that would bring a significant number of jobs.

Also in Albany’s favor, Johnson said, is “an abundant level of natural resources, a good transportation system within our region. We are a commercial hub for Southwest Georgia, and that can be attractive to business.”

He cited new businesses springing up around the city such as Kaufmann Tire, Gander Mountain, Party City, Petsmart, a new Prince auto dealership site, and others.

A major challenge is keeping talented young people here, Johnson believes.

“We’ve got to find ways to diversify the economy outside Atlanta,” Johnson said. “That’s been a big challenge in Georgia and across the country. What we are seeing today is people moving from rural areas to urban settings. More people are moving to the city, and that’s making it harder for smaller towns, smaller metro areas to compete. We’re seeing a brain drain from our communities, and the question is how can we keep our young, our talented people here.”

“We have to be able to manage population growth. When you have a lot of people moving down to Georgia, that puts a strain on infrastructure and resources.”

Another vital factor is health care. “If you don’t have strong health outcomes, that can impact productivity,” he said. “A lot of that has to do with lifestyle choices and the aging demographic, and that drives up health care costs, and that impacts business.”

In response to a question about the national Affordable Care Act, commonly referred to as “Obamacare”, Johnson was pessimistic. “I think it’s going to be very challenging and it will be difficult to create enough competition to drive down health care premiums,” he said.

Speaking about how economic improvement is tracked, Johnson spoke of statistics and physical observation, particularly one seemingly off-beat method.

“Did you know there are some people actually looking at trash?” he said. If the garbage is full of consumer-goods containers such as boxes, that indicates “the economy is looking up.”