A couple of comments on Economics

General, Local, National, Virginia 1 Minute

First, somehow I missed that yesterday, Milton Friedman died. Friedman won the Nobel Prize for economics in 1976. His ideas of monetarism were in contrast to those of John Maynard Keynes. These were the two dominant economists that I studied (in the dark ages) of college.

He [Friedman] said government should allow the free market to operate to solve inflation and other economic problems. But he also urged adoption of a “negative income tax” in which people who earn less than a certain amount would get money from the government.

[…]

Keynes argued that the government should intervene in economic affairs to avoid depressions by increasing spending and controlling interest rates.

Also yesterday, former ODU president and current economics professor James Koch predicted a slowdown in the economy of Hampton Roads. The local economy has been humming along, growing at a rate faster than that of the nation and of Northern Virginia. The very things that propelled the economy along are now expected to contribute to the slowdown: defense spending and housing. We have already seen a slowdown in the real estate market. With Fort Monroe being closed, the rate of defense spending in the area will also decrease.

An interesting part of the report yesterday was the issue of transportation:

While doing research on traffic congestion in Hampton Roads for the seventh annual State of the Region report, he [Koch] talked with several local executives whose companies rely heavily on transportation …

Many of these executives, he said, “are thinking about relocating some or all of their facilities” away from Hampton Roads because of mounting congestion in the region.

I certainly hope the Hampton Roads delegation to the General Assembly was there for this presentation. We cannot afford to lose businesses because of transportation issues. (Part of the reason that we lost Ford, by the way.) Our legislature simply must address our transportation needs.

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5 thoughts on “A couple of comments on Economics”

  2. Why does Professor Koch think that Defense spending will slow down? Why would Congress give less money to defense now? Uuuummmmm…………might it be because of who’s in charge?

    Too bad that democrats will screw Hampton Roads, and Nova when they cut defense spending in the next budget. Oh well. How many people could possibly be employed by the defense industry in Virginia? Couldn’t be more than a 100,000 or so. Oh well.

  3. Jane – try reading the article! This report was issued far in advance of the election.
    Believe it or not, it’s not always about politics.
    Insider – stop the BS. You know there is a laundry list of projects on the table to address the transportation needs.

  4. Viv, the military commands at Ft. Monroe and all of its people and money are going to… Newport News. Ft. Eustis. Last time I checked Newport News was still in Hampton Roads. Please do not speculate on issues for which you have no real information. Also, defense spending is not going to decrease as far as Hampton Roads goes. We are the end users of what is typically made in other parts of the country. We are the tip of the spear, if you will. If Congress decides to make ten fewer F-22s, it doesn’t matter one damn bit to Hampton Roads because we don’t make F-22s. We do make aircraft carriers and Newport News, again in Hampton Roads, will be at the forefront of that as well.

  5. I’m not speculating. That’s what the article says.

    In a summary of ODU’s State of the Region report for 2006, Koch told the gathering that the loss of military installations and personnel in Hampton Roads from the Base Realignment and Closure process will slice about $1 billion from the region’s annual output of $70 billion in goods and services. Most of the impact, he said, will be felt on the Peninsula, where Hampton’s Fort Monroe is scheduled to close by 2011.

    I wish you all would read the linked information before you start jabbering away at me

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