Economist optimistic about recovery
UH economics professor Barton Smith discussed global, national and local economies’ statistics and the Houston economy over the next few years in his presentation, ‘Countdown to Recovery: What’s Been Accomplished; What’s Left to Do.’
Smith, who is the director of the Institute for Regional Forecasting, presented his biannual economic forecast at the Houston Hyatt Regency Hotel on Thursday.
Smith said economists look at several points and rules to define an economic recovery.
The old rule, Smith said, was a nation’s gross domestic product; the new rule is employment-based. But he said a better rule would be real per capita income based, which deals with how much income a person receives.
Smith said that GDP is almost irrelevant now and the unemployment rate is still up.
According to a report released in September by the Texas Workforce Commission and the U.S. Bureau of Labor Statistics, Houston’s unemployment rate is 8.5 percent. Houston lost 15,000 jobs in March, but Smith said that Houston would level out in regards to unemployment at 6,000 to 7,000 jobs lost per month for the rest of the year and in early 2010.
Smith said he was optimistic about the housing market and the economy.
‘Houston’s economy is going to surprise me ‘hellip; and the worst of the recession is probably over for Houston,’ Smith said.
Smith also said that although Houston’s economy has been hit worse than other cities in Texas, it doesn’t have the state’s highest unemployment rate.
‘Houston’s job loss is much less than what we have seen in some of the really hard-hit areas,’ Smith said.
Smith said many economists blame the current recession and the U.S. financial crisis on President Clinton’s decision to repeal the Glass-Steagall Act of 1933.
‘I think that we went through a period of marvelous deregulation of the financial markets and we have to go get back to something much more rational,’ Smith said.
Some students feel there is no hope in sight and wonder what the government is doing with tax funds.
‘If the health care bill passes soon, the economy will not recover,’ corporate communication junior Sabrina Salazar said. ‘Also, the war and the billions being spent there – it seems that nothing has changed.’
At the end of his presentation, Smith said the worst was behind us, but questioned what lies ahead.