Economist sees potential in some Obama proposals, doubts benefits of others - East Valley Tribune: Arizona

Economist sees potential in some Obama proposals, doubts benefits of others

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Posted: Wednesday, January 25, 2012 8:20 pm | Updated: 1:29 pm, Thu Jan 26, 2012.

Some economic initiatives President Barack Obama unveiled in his State of the Union address have the potential to help the Valley improve housing, the jobs picture and more.

A proposal to assist homeowners refinance their mortgages could be significant given the Valley's huge real estate downturn, said Dennis Hoffman, an economics professor at the W.P. Carey School of Business at Arizona State University.

The plan would expand efforts to help homeowners refinance beyond just those whose mortgages are guaranteed by lending giants Fannie Mae and Freddie Mac.

"That would be important for people who are underwater to refinance at lower rates," Hoffman said. "That would be something that could put much-needed disposable income in their pockets."

Hoffman had mixed views on the benefits from Obama's call for increased solar energy.

Solar is a growing East Valley industry, including Tempe-based First Solar's $300-million manufacturing plant being constructed in Mesa.

Hoffman is doubtful many solar panels will be produced domestically because of lower manufacturing costs in developing countries. But a place like Arizona could see new jobs for technicians who install and repair solar panels, he said.

The president's push for infrastructure also holds promise, Hoffman said. That could spur development of the proposed Interstate 10 from the Valley to Las Vegas, triggering substantial development growth.

He also had mixed reactions to Obama choosing Intel's Chandler microprocessor plant as one of the president's nationwide stops to promote an economic blueprint.

Intel is a good example of a company that pays high wages and decided to hire more U.S. workers instead of expand oversees operations.

Intel's $5 billion expansion is expected to add 1,000 jobs when the expansion is completed next year.

"When you add up all of those things, Intel certainly stands out in my mind," Hoffman said.

But the U.S. needs more incentives for people to get technological degrees that companies like Intel require, he said. Obama did tout community college training, but Hoffman said that leads to jobs in low-tech and medium-tech industries that tend to favor other nations to the U.S.

"I didn't hear solutions that are going to help the Intels of the world," he said.

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