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NewsFebruary 16, 2009

@headline_serif 36:About Domazlicky @body copy:Born in Chicago, Ill., Domazlicky lived in a mostly Czech neighborhood with his father, Rudolph, mother, Beverly, three brothers and one sister. At the age of 18 he enrolled in Western Illinois University, where he earned his undergraduate and master[']s degrees in economics in 1970 and 1971 respectively. Domazlicky then pursued and received his doctorate from the University of Wyoming in 1976. It was here that he fell in love with nearby Yellowstone National Park, which he still visits occasionally. [StartDouble]Yellowstone is such a fascinating place,[CloseDouble] Domazlicky said. [StartDouble]You see things there thatt you don[']t see anywhere else. I never get tired of visiting there.[CloseDouble] His teaching career has included MacMurray College in Illinois and Wayne State College in Nebraska. He has been at Southeast for about 19 years. In his spare time Domazlicky collecting and restoring antique radios. He said the hobby improves his problem-solving skills. He also enjoys spending time with students, some of whom he advises through the university[']s chapter of Omicron Delta Epsilon, the international honor society of economics. Domazlicky also publishes special economic impact and benefit cost studies and the quarterly Southeast Missouri Business Indicators newsletter through the Center for Economic and Business Research.

Q: What is so fascinating about teaching college students?

A: It's always been a challenge to get students interested in economics, especially at the lower-level classes. But with the situation we have today it's easier to convince them that economics is important. Teaching has a lot of rewards. I am trying to get students to think like an economist. When that happens it can be very rewarding.

Q: What is something you believe most people don't know about you?

A: When I was teaching at MacMurray I served as the women's head basketball coach for one year. They needed someone to volunteer for the position and they asked me. We won five games and lost 22. The next year they had a different coach and the team didn't win a single game. I also served as an assistant coach for the men's basketball team for a couple of seasons. But I never tried to coach there again because keeping up with 12 girls is always a challenge. And I didn't want to eat burgers and fries for the rest of my life, since we did that after every game when I was the women's coach.

Q: The Center for Economic and Business Research serves the community in a variety of ways, from newsletters to studies for the 24-county region it serves. What would you like to tell folks about the center?

A: This is our 11th year in operation. One of our main goals has always been to conduct the economic analysis and studies for the public and businesses. We've made some strides in the last few years, including a government grant from the Economic Development Administration. Last year we received $85,000 and this year received $100,000. We're increasing our workshops and conferences for the public and businessmen and [business]women.

Q: The Labor Department recently reported that first-time unemployment benefit claims fell by 8,000 to 623,000 and those collecting benefits was the highest ever on a seasonally adjusted basis. The unemployment rate stands at 7.6 nationally, with 598,000 jobs lost in January, the most in nearly 35 years. And sales of new homes in December was the lowest since 1963.

I've heard some say we are living in times similar to 1990 to 1991 when a downturn hit much of the world; others contend we are approaching the 1980 to 1982 recession when unemployment hit 10.8 percent. Some believe we may reach economic lows rivaling the Great Depression. What time period do you think we most closely resemble and where will we end?

A: In some ways it's like the Great Depression because we have problems with the banking system. And in other ways it's similar to the 1980s recession. But even then unemployment reached above 10 percent and I don't believe we'll get there. What worries me long-term is that the federal reserve is flooded with liquidity and that can lead to inflation. But I believe eventually things will turn around.

When I look at the situation, this country got into it by overspending. The government has run up a deficit that has reached the trillion-dollar level. And things collapsed when the housing bubble burst.

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Q: The $787 billion stimulus plan promises to renew consumer confidence in the economy. New education spending is about $100 billion for funding to save teaching jobs and school district budgets and performance center grants. Designed to create or save as many as 4 million jobs, the bill promises to cut taxes for most Americans. Other funding includes $4 billion in job training, $25-a-week increases in weekly unemployment benefits, a 13 percent increase in food-stamp-program money and $137 billion in new health-care spending. Approximately $85.7 billion is dedicated to infrastructure repairs and construction.

But some have criticized the bill, claiming it includes too much pork and fails to create jobs. The Associated Press reported some of the pork includes $200 million in World War II compensation for Filipino veterans, most of whom do not live in the United States, $8 billion for high-speed rail projects that could benefit a proposal to link a rail line between Disneyland in California and Las Vegas, and $1 billion to create a clean coal plant in Illinois and $800 million for other carbon-capture projects.

Q: What do you think about the latest bill?

A: It's too much of the old-time thinking that we can spend our way out of this. It doesn't make sense for the government to borrow money to give tax breaks to individuals. In the meantime we keep running up our debt. The stimulus bill should focus solely on the ability to produce.

The infrastructure investment aspect makes sense. The human capital also makes sense. But I have not seen in the bill tax breaks for businesses that buy capital goods. Encouraging businesses to buy should have been the main focus of the package. This is just too much short-term thinking. We need to think long-term. And I'm sure there's less pork there than what it could be.

Q: So when do you believe the situation will turn around?

A: It may happen later this year. By then the lower interest rates and effects of the stimulus should take effect.

Q: What advice would you give people until things turn around?

A: Keep a real handle on their spending. I wouldn't take on any more debt in this environment. Instead, they need to pay down debt. The only way to improve your situation is to spend less, save more, improve your balance sheet and you'll be better in the long run.

If you're young, you don't really need to worry about the way the stock market has gone down. But if you're not too far from retirement you may have something to be concerned about. It's not as important how much you save but that you're saving.

The situation is not as bad as it looks. It's worse than some people expected. But there are glimmers of hope, such as the best month in January in retail sales since November 2007, that things will improve.

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