Gov. barbour invited me to lunch and he didn’t have the greatest news to tell.

“I recognize that the national economy has softened and Mississippi is not immune from the problems of the financial services industry,” he said.

“Mississippi has a relatively high percentage of subprime mortgages and we have a high percentage of home ownership - 70 percent. Many Mississippians pay a high percentage of their income to their mortgage and these are automatically classified as subprime.”

Well that’s a happy note with which to start the new year!

It was no surprise to me. My company’s ad sales growth is starting to weaken for the first time since 2003. Consumer confidence, factory orders, unemployment and other indices are indicating that the economy hasn’t been this soft since - you guessed it - 2003. It is what it is.

Darn. And things were going so well! Nice way to ruin the holiday season.

What can you do? We will never get rid of business cycles. Things get heated up, then they cool back down. It’s a self-regulating cycle.

Fortunately, the feds can lower interest rates with a wave of the hand, pumping money into the economy when things are soft and taking money out when things get hot. This has proven remarkably effective over the years. I am looking forward to lower interest rates.

As a businessman, I can tell you that fed policy works. When sales are soft, I start to worry. Then the fed starts lowering interest costs and I calm down. It really does help keep the economy on an even keel.

It’s one of the few nice things about being in debt. The feds give the leveraged ones a break to help stimulate the economy.

Will we have a recession? The experts are saying it’s fifty-fifty. I’ll bet we have a small bump in the road and then come roaring back, getting even more over-heated than before. Then we’ll have a real doozy around 2011. Just like the last decade.

The economic cycle of this decade is strangely similar to the last decade. We even had a bump in 1997 when the fed had to lower rates for a bit. Then came the incredible years of 1998, 1999 and 2000.

Most people aren’t fundamentally affected by a recession, but business does slow down and profits and values do drop. Several million people may lose their jobs. This is a huge catastrophe, but only represents a tiny sliver of our workforce.

The dollar is extremely weak right now which usually helps Mississippi, raising demand for our timber and crops. Mississippi never booms and its busts are muted.

Gov. Barbour said state tax revenue is tracking at a three percent increase - way down from the fantastic eight and nine percent increases of the last two years. No doubt all the Katrina government and insurance money helped sales tax revenue tremendously.

This is already causing problems. The Legislature has been counting on those big increases to fund our enormous appetite for educational expenditures.

If you’re going to spend money, education is a good way to do it. It’s kind of like the old saying about advertising. I know half is wasted, I just don’t know which half.

Per pupil, educational spending is a difficult figure to deduce. Many charts only show state and local spending. When you add federal grants, the number escalates, probably around $14,000 per student in Mississippi. This is more than triple the average private tuition.

There is one great idea that many educational experts are supporting: getting day care centers to have reading programs.

More and more studies are indicating the importance of the very earliest years of a child’s life. Eighty percent of preschoolers are already enrolled in some kind of day care. It would be almost criminal not to have reading programs at these centers.

Barbour is supporting such legislation, and educational support groups, such as the Parents’ Campaign, are supporting this measure as well.

As Barbour says, “I don’t see any reason to create a 14th grade, when 81 percent of these children are already in day care institutions.”

The Early Childhood Education Initiative last year received $5 million to come up with a rating system for reading programs at day care centers. Already, day care centers are eligible for grants when they have reading programs.

Claiborne Barksdale and Nancy Loome are two Mississippians who are battling for education. I met with them recently to discuss their legislative wish list. They are chairman and executive director of the Parents’ Campaign - an education advocacy organization.

“Thirty-five percent of Mississippians are functionally illiterate,” Barksdale told me, “meaning that the decoding is so difficult that they can’t comprehend the words. We can’t tweak our way out of this problem.”

Children from poor households are exposed to a tenth of the number of words compared to higher income households. This lack of brain stimulation in the formative years stunts development forever. The key is to break this cycle.

Including Head Start centers, there are 1,800 licensed day care centers in Mississippi. Children are in these centers within the first few months of their lives. This is the golden opportunity to stimulate their brains and expose them to a rich language environment. An ounce of prevention is worth a pound of cure.

The Parents’ Campaign has a long wish list: fully funding the Mississippi Adequate Education Act; improved training for school board members; appointing superintendents; increasing teacher pay; decreasing the school bond threshold to 50 percent; additional funding for at-risk students; and redesigning the curriculum to make school more relevant to real life.

It’s true that we spend a huge amount on public education, but what is the alternative? Nobody disputes that education is the key. That being said, we must continue to embrace new techniques such as introducing private school competition and pre-K reading programs in day care centers.

Our state economy may be softening, but that will not change one iota the educational imperative of our state. We either do it or fail.