Wed., November 18, 2009 3:55pm (EST)

State Economist: Banks Need to Recover Before Jobs Do
By Melissa Stiers
Updated: 5 years ago

ATLANTA  —  
Economist says banking mess needs to clear before employment can recover.  (historical photo of Bank of the United State failure in 1931 courtesy of Wikimedia)
Economist says banking mess needs to clear before employment can recover. (historical photo of Bank of the United State failure in 1931 courtesy of Wikimedia)
The state’s economist has pulled out his crystal ball and he predicts significant recovery won’t come until 2011.

Dr. Rajeev Dhawan at the Economic Forecasting Center at Georgia State University says to see job growth the country needs a spark comparable to the internet revolution of the 90s or the construction boon of the early 2000's.

But before that spark can ignite, Dhawan says the banks need to be cleaned up first.

"If you walk up to a bank that is struggling to survive that’s in a cease and desist order or has been asked to raise capital," says Dhawan, "you can come up with the best business plan to them, but they will not be in the condition to make the loan, but if they’ve been made healthy somehow, then you come up with the spark, the plan, then you will get the funding."

Dhawan says it’s going to take some time for the Feds to work through the banking mess. In the meantime, job recovery will languish.

The situation is especially bad in Georgia. Dhawan says the state will continue to seep jobs through 2010. He anticipates another 60,000 jobs will be slashed next year.