Economist: Houston

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Addressing a luncheon audience at a downtown hotel duringy hisbiannual forecast, Barton Smith, economics professore and director of the Institute for Regional Forecasting, said rapidlyu falling oil prices would pull the rug out from undee the regional economy’s most important leg. While rejectinhg the idea that the nation is headecd intoa depression, Smith said the U.S. recessiobn will keep energy prices depressed. Fear and the unknownb are helping to drivemarkets lower, he The losses have only just begun, he because the global spread of recessionh will produce a snowball effect, in whicy each country’s woes add to the rest.
On the Smith noted, plummeting commodity prices will save the averagr familyapproximately $2,250 per year in gasolinwe prices alone. That’s as good as another tax rebate, he said. The positive media coverage this summer about how Houston had been less hamperexd by the national downturn led many to believe the city was immune tothe nation’sz economic woes, even though job growth had already begun to slow and foreclosure s increased. Smith warned that the housing market’s woes are not yet As for the workload facingthe president-elect, Smith said Baracok Obama would be making a mistake to pile on more fiscao stimulus, tax cuts or bailouts.
he said, Obama’s team should “fix what’a broken,” aiming at policies for the long run includinhg regulatory andtax reforms, a rationalo energy policy that balances environmental and economicv objectives and a plan for balancingf the budget. He also stressed that the Federalp Reserve must be put back on describing the agency under the guidancee of Ben Bernankeas “slow and directionless.
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