Tough Times Ahead Says Houston Economics Professor

Meteorologists say the forecast for Houston this week is hot and dry. The longterm economic forecast isn't much different. The University of Houston's noted economics professor Dr Barton Smith gave his bi-annual address today. Smith says Houstonians should prepare for rough times. Bill Stamps has more.
image of economics professor Barton SmithLast year Houston residents had to prepare for several tropical storms. One of them turned out to be a deadly hurricane. Professor Dr Barton Smith says Houstonians must now prepare for an economic storm, the casualties won't be loss of life, but loss of jobs — up to sixty thousand.

"Because of the unusual character of 2008, I think some Houstonians begin to think that we're going to get through this storm unscathed. We're going to lose jobs in Houston this year. A fairly substantial amount of jobs and I think Houstonians need to be prepared for that."

Smith expects those jobs to go away over a two year period. He says this will be something the younger generation has never seen before. Steve Pali is the owner of Palico, a commercial real estate company. He says the economic downturn has already affected his business.

"People can't get money. I had two or three fairly large deals that were supposed to close before the end of the year, and they just couldn't get their financing."

Another thing Smith wanted to address in his talk, is what he calls crazy stories put out by the media to scare people.

"One example is the money supply is going so fast, the fed is printing money so fast, we're going to have hyper-inflation. That's not true. That's not going to happen."

Whether it's the economy or the recent swine flue, some have accused both the media and public officials of blowing things out of proportion. But Smith says in both cases there are similarities in how we go about preparing.
image of conference crowd
"Do we need to put our economic masks on? I don't know if we need to put our masks on, but we need to put on an air of caution however, and just not go into this blindly thinking we can build another five or six million square feet of office space, or twenty thousand more units of apartment complexes. We need to go into the next two years with our eyes wide open."


Another swine flu comparison...Smith believes the impending economic storm of '09 will hurt, but won't be lethal.

Bill Stamps KUHF Houston Public Radio News.