This episode I am joined by Dr. Ernie Goss. Dr. Goss is the MacAllister chair and regional economics at Creighton University and director of the Goss Institute in Denver, Colorado.
Dr. Goss and I talk about the effects of the Covid-19 virus on the economy. We discuss the following:
- What will happen to universities and athletic departments?
- Who’s going to be most hurt by this economy?
- Is Creighton full of rich people?
- How much money will Lincoln and the surrounding area lose if there are no fall sports?
- Why are Nebraska football and Creighton basketball so important to the state of Nebraska?
- Are those numbers in economic impact studies made up?
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About the Transcript
Keep in mind that the following is a transcript. . I use a service that automates the first draft. As much as “artificial intelligence” is included in the description of every bit of technology these days, it’s clear that computers understanding human speech is more artificial than intelligent. The transcript has been edited to take out human speech bites, you know, um, okay, uh, but it’s not been edited to be an “article”.
Jon Johnston: Welcome to Jon’s Post Live Crisis. I am your host, Jon Johnston, founder and manager of CornNation.com. You’re Nebraska Cornhuskers, site of hoping we have a college football season. I am joined today by Dr. Ernie Goss. Dr. Goss is the MacAllister chair and regional economics at Creighton University and director of the Goss Institute in Denver, Colorado. Welcome, Doctor Goss. How are you doing today?
Dr. Ernie Goss: Hey, Jon, nice to be with you.
Jon Johnston: This episode, we’re going to talk about the effects of the covid-19 economy on universities, athletic departments and on parts of the private sector that rely upon college sports related revenue, it is becoming more clear that as time goes on, the effects of covid-19 are going to linger for many years to come. I think that when we started this, we all thought that, you know, when March hit, we get get the lockdown thing. We thought, oh, OK, well, a couple of months in this all be over. And I think it’s pretty clear now it’s going to be around for for quite a while.
Dr. Ernie Goss: Oh, absolutely, and they obviously focus on the economic portion of it and the the lockdowns are having much bigger impacts than we initially thought. As you said, many of us, including myself, thought this would be settled quickly. Well, it hasn’t been settled quickly. And now, Jon, one of the real problems, as I see it, is become a political issue. In other words, how a virus has now become entered into politics. By that, I mean, you’ve got that one on the one side. You’ve got those who want to keep it locked down. Let’s lock it down. Everything is Trump’s fault. And you got the other side say, oh, no, us open it up. And Trump’s done a nice job. Now, the answer, in my judgment, is somewhere between those two extremes. And unfortunately, there’s a lot of collateral damage in this, and particularly colleges, I would say colleges and universities. I’m Creighton University. And boy, the impacts are just now we’re seeing more and more of those and not just in the athletic departments, but spilling over into not athletics. But it’s really thinking about basketball, football, their major impacts.
Jon Johnston: So I’m not as familiar with Creighton University in the interest of full disclosure, I always looked at yeah, I grew up in western Nebraska and by that I mean out by North Platte, a small town named Curtis. I always looked at Creighton as that’s where all the rich people went to school in Omaha. Those darn city people, you know. But how is this affecting Creighton as a university academic on the academic side first?
Dr. Ernie Goss: Well, just to correct you, there is not a bunch of rich, rich folks that I wish for. Well, I don’t know if I wish it were, but anyway, it’s it’s all the way from the top to the bottom of the president’s office and the board all the way down to everyone. That’s staff and faculty. And, Jon, we’re talking about staggering classes now. Who’s got this mandate of social distancing, for example? So if I teach a class, we accreting teach smaller classes class. So we have our we don’t have these auditorium classes. So we have these smaller classes, class size, and we have fit thirty five individuals in there, perhaps. Well, if you got a social distance, that means I’m or how do I do this. And by. So what we have to do is we’re going to have to do some sort of patchwork. In other words, the individuals, half the class comes in for one day and and their own line that that the other half is on line that day. Then the next day we switch it. I mean, and that’s still being worked out. Jon, as you and I speak today, these are not issues that we know about. And it’s much like football. We don’t know what’s going to happen. At least I don’t I certainly don’t know what’s going to happen in basketball. All of us care basketball, the UNC, you know, all the all the universities. Major, major impact, Jon. And I would say we’re front and center to that. And we don’t know at this point. It’s all a mystery to many to most of us.
Jon Johnston: So had you guys seen I don’t know if you know this or not, but I mean, have you seen drops in enrollment and things like that at all?
Dr. Ernie Goss: We have seen drops in enrollment, it’s unfortunate, but they’re holding up reasonably well, Jon, it’s most on the freshman side. Incoming freshman is the incoming freshman that has been, I won’t say significant, but it has dropped off. I think the institutions like Creighton and other larger institutions are going to fare... I won’t say smooth sailing. It’s not going to be smooth sailing, but is we’re going to fare we’re going to come out at the end and hopefully be a better school than we were when we entered it. It’s going to be rough sailing, some of the smaller schools. I just don’t see how they’re going to survive this. And especially when you don’t have taxpayer support. And that’s that’s many schools out there in Nebraska and Minnesota in the area that we survey, we do a monthly survey in this part of the country and is having some big impacts, particularly on rural areas. And you come from Curtis, Nebraska. That’s it. That’s I would say that qualifies as pretty rural out there. And it’s it’s hitting those areas as well.
Jon Johnston: So what do you think if this last like I started with a few years, I mean, what do you think the long term harm will be to universities, whether it be in academics or sports?
Dr. Ernie Goss: Well, you know, if you look at the sports and of course, you focus on the sports, a lot of people I grew up on the East Coast a little bit. Not everybody considers Georgia East Coast, but it does have an east coast to it. And what we know about Nebraska, unfortunately, in many cases, what they know is University, Nebraska, football, Husker football, Husker basketball, and in some cases, Creighton basketball. Now, that Creighton is the Big East. Oh, right. Well, that’s in Omaha, Nebraska. So what we translate to the broader market is, is the is the getting the camel’s nose under the tent. I’ll say it that way. In other words, hey, let’s think about Nebraska. Let’s think about Omaha. Let’s think about Lincoln and and otherwise, sometimes we just go unnoticed now by those on the east and West Coast without this connection to sports. And by the way, Jon, it’s not just Husker football. It’s amateur and non, non professional sports. For example, the College World Series, for example, Olympic trials, for example, the NCAA March Madness. All this went away this year. And it is it is hurting. I would say it hurts all of our recognition’s. But it’s not just us. There are other other states out there, other cities, other schools are seeing somewhat similar impacts.
Jon Johnston: So the University of Nebraska Athletic Department doesn’t get any state support, nor does it get revenue from the University of Nebraska, at least the academic side, because I’ve been around they are are fairly well run athletic department. Creighton, I read an article where they do get help from the university, but it’s not as much as other. It’s actually very low. If this goes on long enough do you see universities cutting their support during their athletic departments because they have to? It’s a matter of survival? Or what do you think’s going to happen there?
Dr. Ernie Goss: No doubt about it, Jon, where cuts and particularly the what’s sometimes called the non revenue sports, swimming, for example, now volleyball for University of Nebraska is a big time sport and it Creighton as well. Women’s volleyball is big in this part of the country, much bigger than it is in the rest of the nation. But we’ve seen, for example, here in Omaha, University of Nebraska, Omaha, drop wrestling now wrestling as big time. A big time sport here, but it’s also Olympic big time Olympic sport. So chopping that off has some significant impacts across other sports and other and the academic programs. So there will be cuts to the sports. And again, there’ll be more on the side of not so much basketball and volleyball and football, but those those sports, those sports where you don’t have a lot of large audiences.
Jon Johnston: In 2014, the University of Nebraska conducted a study in which they showed that UNL Athletics had an impact of almost two hundred and fifty million dollars on Lincoln and the metro area. You know, a guy like me, when I look at stuff like that, I think I’m not an economist. Those numbers just look like they’re made up. Can you tell us where do these things come from?
Dr. Ernie Goss: Oh, gosh, I do a lot of impact study, so I hope and I have to say, Jon, I’ve never made numbers up and nor I have my Eric Thompson’s, a friend of mine who did the study at the University of Nebraska, Lincoln. And I’ll tell you, I worked with he doesn’t make the numbers up so I can I can tell you now, they may not you might question the validity of that reliability of the data, but it’s not a but anyway. Here’s the impacts come from Jon from us. We in Nebraska, instead of spending our money in Kansas City in entertainment, we spent it in Lincoln for the ballgame. So we go down. We drive down from I would drive down, I would be staying in a hotel and in Lincoln those. But instead of going to Kansas City, I go to Lincoln and watch the game there. And and that’s that’s part of those who would have spent outside to spend in. The other part is those who who come in from outside. I mean, I have a colleague, one of my Creighton colleagues, he’s worked remotely from Virginia. He comes in and I rarely see him except during the football season.
Dr. Ernie Goss: And he’s here every weekend there’s a home game. He’s coming down and he arranges a meeting here in Omaha and Lincoln to coincide with the Husker football game. So there are lots of folks coming in and that’s part of it. Now, where does the number come from? It comes from spending in the hotels. It comes to spending in the restaurants because from spending on tickets with all these and there are very good sources for that data. In other words, how much hotel motel taxes. So these are and importantly, Jon, these are revenues where there’s a high tax on it. In other words, hotel, motel tax, rental cars. Think about rental cars. I mean, how many times have I rented a car in Omaha? Not very often, thank goodness. But those who come in from outside to watch a football game, they’ve got to rent a car or take an Uber that has huge impacts and their models. And I use the same models of area it used to. And we use those called Implan models that show the ripple effects throughout the economy.
Jon Johnston: OK, so they’re not made up.
Dr. Ernie Goss: Yeah, no, I didn’t mean to sound defensive, Jon.
Jon Johnston: You know, it takes a few years ago, Texas A&M did this, how much marketing? Oh, come on, what’s the guy’s name, their fancy quarterback did that flamed out?
Dr. Ernie Goss: Who could forget him, but I have forgotten his name, but I remember Johnny something Johnny Football...
Jon Johnston: Johnny Manziel.
Dr. Ernie Goss: Right.
Jon Johnston: And they did this marketing study that showed he brought in 80 billion dollars and I always looked at them when how in the hell did they even come up with that anyway? I mean, if we’re probably looking at the fact, even though it’s against my biggest hopes, that we’re probably not it’s going to be very difficult to have college sports this fall. It’s going to be very difficult to have football. If there are no small college sports who expect to get hit the hardest in the private sector.
Dr. Ernie Goss: Oh, it’s leisure and hospitality industry, as we call it now, the hotels, motels, restaurants, taxi service, all these, I guess, taxi services, not in leisure and hospitality, but these are the industries that are getting it. They’re already getting it, Jon. I mean, this is one heck of a hit. And what’s happened, Jon, is the federal government is is putting in sending money to us as consumers, hoping we will spend it. Where the heck are we going to spend it? I mean, look, I mean, everyone is out there thinking, well, I don’t want to go to a restaurant. I want to get contract covid-19. So you sit at home instead of buying potentially a nice steak dinner, by the way, which comes with a lot of beef from Nebraska. Nice steak dinner. You’re spending it on Pizza Hut, so maybe I’d better make it a pizza. How about that? And that’s coming in much cheaper. So what’s happened, Jon, is savings is spiked and others were saving a lot more money right now. Well, we need to be out there spending. And one of the things we need to be spending on and it just think about how many people live for four Husker football in the fall. There are guys and gals out there farming during the year doing a heck of a job. Pushing it is a kind of law that are warning they’re looking forward to that Husker Games in the fall. I mean, this is a this is not just an economic issue and I’m going where I shouldn’t be. But what about the psychological impact of just shelter in place, as it was called? Well, I for one, and we’re doing this remotely, I, for one, am getting tired of being sheltered in place. And I want to see a good football game in person. And I would even like to see it on television, which we’re not going to be able to see in either, I guess.
Jon Johnston: Yeah, I you know, I haven’t run running the website, I do I do hear from a lot of people who are just like I don’t know what I don’t know what we’re going to do if there’s no fall sports. I do a lot of work with the University of Minnesota as an IT consultant in my real life. And one of the guys I work with closely, there is a Penn State alum and he’s just he’s beside himself. If there isn’t going to be Penn State football or Nebraska football this year, are you going to fill it with something else? I guess, and I have no idea what that is.
Dr. Ernie Goss: Well, some more those we in academics, some of us like to think that sports don’t matter. In other words, it’s us, it’s we academics really, it’s all of us. And sports are a big part of it. I mean, watch what happens when a team wins a national championship, their enrollment spike the next year. And that happens across the nation. And I don’t care if it’s Harvard of Harvard should ever win a national football championship, which I’ll put some good money on that one. It ain’t going to happen. But nonetheless, think about what it means to Penn State to win the national championship. How many people know about Penn State across the nation and the academic programs? Only those of us in academics. But every everybody knows about Penn State football. And they that translates into a positive image of the university, in my judgment.
Jon Johnston: You mentioned long term effects on the private sector, if this thing goes on two or three years, I mean, you’d still need hotels. If you’re going to have anything, you still need restaurants. I mean, what is going to happen to these people? Is this going to be a giant consolidation, kind of like Amazon takes over the world or. I don’t know, Taco Bell is all the restaurants, God help us.
Dr. Ernie Goss: Well, right now, you’re talking about closures of restaurants, significant closures. One restaurant here that I in Omaha that I go to did go to regularly continue to go to. It’s been in business for 100 years. Spring is out. Is there? They’re closing. I mean, we’re talking about major hits. And it again a lot of it is connected to football in this case. I mean, the restaurant I’m talking about there are there monitor. There are TV sets, monitors all along the walls to let us watch the football, watch great basketball, watch Penn State football. And so it it’s it’s I mean, it’s embedded in us. I mean, I’m a I’m a long term football fan. I grew up with a Georgia Tech. I grew up near Atlanta. So I was a Georgia Tech fan for much of my oh, my first 18 years for sure. So it has huge impacts.
Jon Johnston: So you mentioned people are saving more money. This was a problem. I mean, America didn’t we did not have a good savings ethic, I guess maybe for lack of a better term. Do you see anything positive coming out of this?
Dr. Ernie Goss: Oh, yeah, I mean, there’s some reorganizations that are being taken taking place, for example, this interview you and I are doing is is online. So we’re now honing our skills in online interviewing and doing a doing delivery of products, services, services via via the Internet, for example, K - 12 education is now we do hybrid approaches going forward. That’s tough right now. But going forward, say the next year, we’re going to be much better at delivering those products. In terms of of the hotels, we are going to see some consolidation and reorganization of spending. Where do you, where do we spend in the future? And it’s we as you didn’t say, but we we’re a nation of overspenders. We’ve we’ve overspent and we allow money coming in from globally to support our overspending. Well, now,the federal government still continues to overspend and and we’re going to have to pay for that someday and probably won’t be me that’ll be paying for the younger generations. And that’s unfortunate. That’s another issue. But right now, there’s increasing savings. It’s not such a bad thing in of itself. Now, what it does to others, I mean, I’d like to have everyone going out right now and buying a Creighton t shirt or something, whatever, or sending money to create university or by enrolling in a a a class at Creighton for noncredit that helps me. So I mean, in other words, there are some positive impacts that we have more spending to do the things that we didn’t do before.
Jon Johnston: Ok, all the way back in 2013, I think it was, I wrote an article about MOOCs, right. What is a mass massive online courses and how they would change the face of college colleges and universities forever, that we would no longer have the need to actually have a college or university campus because people could move everything online. Do you think that’s even a reality? I mean, the MOOC thing is kind of silly because most people never complete those courses, really. But the whole idea of just, you know, the nonexistence of a campus environment, do you see that anywhere in the next decade?
Dr. Ernie Goss: Well, but there’s also just one thing missing there, and it will be a big, big part going for a much bigger part win for. But mothers and fathers, grandfathers and grandmothers send their grand kids and kids off to these universities to be socialized. So there’s a lot of that that goes on that will continue to grow and we will never, ever break that. And but a lot of folks and the over say in the post, say twenty two if you’re older, twenty five, for example, how we break it down at most universities is twenty five and above. Continuing education breaks begins at age twenty five for most universities. So that’s going to change as opposed to older the twenty five plus the graduate students. A lot of that’s going to be. I’m teaching a graduate class online this fall that I’ve been teaching that online class for several years. So it’s, that’s not new. But the that will change. In other words, the will the the graduate schools graduate education, continuing education and undergraduate education for those who are over.
Jon Johnston: I don’t know if this is your area or if you look at this at all, but one of the concerns I have is a newspapers were struggling horribly before this started. I’m around a bunch of these guys that write for the Omaha paper and the Lincoln paper and photographers and things like that. And if there’s no fall college sports, I wonder how they’re going to survive. This looks like if this continues on, it’s going to be like an extinction level event for a lot of media. Can you comment on that?
Dr. Ernie Goss: Oh, absolutely, I mean, why do many of us get the. I am a subscriber to the online World Herald, for example, and I can’t wait to get the Sunday paper and see all the reviews of football games across the nation. And, of course, especially here in Nebraska, it will have and will have an impact, a negative impact on that media. It will be very much affected, I think. I mean, it’s amazing how many I mean, I’m a big sports fan, so I’m a I’m a baseball football. If there’s anything connected with with some sort of round object or even oblong like football, I’m there and I’m watching. I mean, I’m I’m a recovering I played sports in high school. And except for the extreme discrimination that I was always discriminated against highly because based on my abilities, of course, I was not good enough to play college sports. I’m in the background watching, but I spend money and what’s happening right now is that we get the potential of the vaccine, which may be a game changer for all of us now. And we need to see that. And I for one and I hear I’m getting outside my area of expertise, which is in the medical area, I can even put a Band-Aid on. Well, so is this lockdown. I just don’t see it. The lockdown has gotten into the political area where there are some governors, I believe, in my judgment, are closing down economies for a political agenda.I don’t think that’s the way to do it, of course. And moving ahead, I think to some degree we have to if a vaccine is not in the end not imminent, that we’re going to have to buy it and move ahead. We’re going to have to social distance in a stadium and take our chances. And some of us will be infected and some of us will be hospitalized. But so would I be from measles or from the flu and whatever. I mean, this is just there’s such a political dimension to this. And men and women out there, boys and girls, young men and young women that want to continue their lives. And we’re telling them many people in my age are saying, no, no, we’re going to we’re going to cut it off. And they I can imagine the students in my class sitting in class students since March when we locked down. I haven’t been in a classroom since March. I’ve been online. I would be angry if I were them. I mean, they’re sitting there thinking right now, this is for most of us, this is nothing more than a bad cold. And you’re telling me that you’re you’re cutting off my social life. You’re cutting down my life. I that again, that’s I’m out way outside my of economics, but I can see it again. There’s a huge psychological impact here that we’re we’re ignoring or perhaps not ignoring. But it’s big, big, big.
Jon Johnston: Yeah, it seems like whenever you talk about that side of it, you know, the people bring up the medical people and they follow the science and stuff like that. And I think that what bugs me about that is there’s about eighty three thousand different branches of science that you can follow. This isn’t a one, this isn’t a hit the easy button issue. I guess it’s there’s a massive number of combinations that can be followed here and people tend to pick one and go down that path. And it’s very frustrating.
Dr. Ernie Goss: If the idea is to prevent the death of one person from covid-19, we’re in big trouble. I mean, in other words, if we’re talking about preventing no automobile deaths, then let’s stop driving cars. Well, we can’t do that. Well, we can’t we can’t shut down our economy. We can’t shut down our universities. We can’t shut down football, basketball. All this to prevent some negative outcomes because they’re going to be some huge negative outcomes from shutting down.
Jon Johnston: All right, is there is there anything else you want to add? I think I probably run out of questions or gotten through the questions I wanted to ask.
Dr. Ernie Goss: Well, we’ve covered a lot of territory, Jon, I just think there are long term impacts that sometimes we ignore the short term impacts are, of course, the probably $300M, for example, Husker football, three hundred million dollars of short term impacts. But the longer term impacts the public, the public relations impacts of of getting out of that. Folks know how there is in Nebraska out there. Hey, there is something beyond the east and west coast. There is a life there. And it looks good on those Saturday afternoons when you watch the sun, if you’re sitting in a bar in Atlanta, my case when I go home, when I go back to where I grew up, I’ll sit in a bar and watch the good sunny football game. And I’m like, that’s that’s good. It makes you feel good. And I mean, where is this? I’m an economist. It’s not all a bunch of numbers. It’s also the psychological impacts. And there are huge and long term I’m concerned, you know.
Jon Johnston: What do you mean there’s real people behind those numbers? Is that what you’re saying?
Dr. Ernie Goss: Those numbers, we don’t we we we take the numbers from the bureau, the government that they provide us now, they make it they may make it up now. You’ll have to talk to them about whether they make those numbers up. Now, some of my colleagues are some of the guys and gals I went to school with are generating those numbers. So I hope they’re not making them up.
Jon Johnston: All right, I think we’ll end there. This has been Jon’s Postlife Crisis. Thank you for Dr. Goss for joining me and discussing what really is a honestly kind of a sucky subject.
Dr. Ernie Goss: It is.
Jon Johnston: It needs to be talked about. Go Big Red. And thanks for listening.
Dr. Ernie Goss: And go Bluejays, thanks, Jon.