UF macroeconomics professor Dave Denslow appeared in front of the Florida House of Representatives Feb. 4 to share his take on the economy and its effect on Florida.
In an interview Thursday, he said the state's economic future is uncertain and Floridians should expect a deeper recession than the rest of the nation. He also addressed the comparisons drawn between today's economy and the Great Depression.
"I don't think it's going to be as bad as the Great Depression," he said. "Having gone through that experience, we have learned from it."
While a similar credit crunch led to the crisis of 1929, he said, that situation was worsened by a trade war.
Some worry a trade war could arise from the stimulus package's proposed "Buy American" clause, Denslow wrote in an e-mail on Sunday.
This clause mandates that federally funded projects use U.S.-made products. The clause is meant to support American companies, but some argue the provision violates established trade agreements and might spur other countries to cut U.S. imports.
Financial management professor Joel Houston agrees with Denslow.
"I think there is a significant chance that this recession will be deeper and longer than any we have seen in our lifetime," Houston wrote in an e-mail. "I don't expect that this downturn will be as bad as what was observed during the Great Depression."
Still, Houston wrote he was not convinced the worst is over for Wall Street, citing substantial losses.
While some students think the economy is to blame for the tough job market, others think panicking may be harmful, such as UF engineering graduate student Jonathon Jeske.
"People are worsening the effects by propagating the idea of an impending depression," Jeske said.
But according to Denslow, the reality is that Florida will see a worse economy than its fellow states in the short run.
"We're experiencing a more severe housing crash than the country overall," Denslow said.
Florida also faced the second-largest decrease in employment during 2008, after California, according to The Bureau of Labor Statistics' Web site.
Despite this, Denslow said Florida's long-run prospects are comparatively higher because of the warm climate, tourism and retirees.
As the Baby Boomer population ages, more retirees will strain Medicare and Social Security, he said. But Boomers will help Florida's economy as they flock to the Sunshine state. Currently the recession is expected to last through the third quarter of this year - this summer, he said. Then, he expects things to flatten out.
Neeta Thoguluva, a UF finance senior, agreed with the forecast and said President Barack Obama's plans and the stimulus package will soon help the economy.
Denslow said upcoming graduates will have a hard time getting a job, but UF students will have an advantage due to the prestige of their alma mater. He advised students to build their resume by taking courses that teach analytical, writing and creative-thinking skills.
"You can take the easy route through this vast university and not learn a thing," he said. "Choose easy classes and you'll get a degree that means nothing."
