California is entering its worst recession since the 1940s, according to a Jan. 15 report from the UC Santa Barbara Economic Forecast Project. The recession’s impact on the state will be more severe than in other states because of its “well-publicized and very serious budget crisis,” Economic Forecast Project officials said.
“California’s outlook is bleak,” Bill Watkins, the project’s executive director, said in a summary of the report. “Part of the problem is the lack of serious commitment on the part of state government. They seem unable to address any serious issue. The consequence will be that California’s economy will be held back by our policy makers.”
However, Watkins went on to say in the summary that blame can’t fall solely on the shoulders of government officials.
“There is very little policy makers can do to minimize the recession’s impact on California’s economy,” Watkins said in the summary.
One of the only bright spots for California, the report said, is that recent data indicates the state might be entering a new phase of the decline.
“We have indications that the period where California declined more rapidly than the United States may be over. This may be temporary, but we see some measures returning to more typical relationships,” Watkins said in his summary.
“The gap between California home ownership and United States home ownership has returned to normal. Jobs have recently been declining more rapidly nationally than in California,” he said. “Still, we’re in a recession. It is small comfort that the rest of the United States seems to be hurting economically as badly as we are hurting economically.”
For more information about the UCSB Economic Forecast Project or copies of its most recent report, visit ucsb-efp.com.
This article appears in Jan 22-29, 2009.
