TEMPLE — Mark Dotzour, chief economist and director of research for the Real Estate Center at Texas A&M University, told community business leaders he is optimistic about the future, but also pointed to potential problem spots during the CentraLand Title Company’s 2014 Economic Summit on Friday at the Frank W. Mayborn Convention and Civic Center.
“It’s been amazing to see how Dr. Dotzour has developed and progressed,” said Thomas Baird, with the Baird Crews, Schiller & Whitaker Law Firm. “He has not only academic credentials, he has the experience and years in private business. It’s important that we be able to predict what the future is going to bring.”
By knowing what to expect economically, “we are better prepared, more confident and can do things to help economic growth,” Baird said. “It also helps us know when to be cautious.”
In 2006, Dotzour said he was bearish about the economy and concerned about a housing market collapse “and people thought I was crazy,” he said. “But I was concerned about loaning money to lower-income people who would be able to pay home loans. It was a great social experiment that turned out not to work so good.”
When the economy remained sluggish in 2011, Dotzour said he saw signs of a turnaround.
“In 2011, I turned bullish, and again, people in the business community didn’t agree because they are suspicious of government,” he said. “My optimism is based on the American people and has nothing to do with the government. The government is a hired hand, and public servants have been failing us for a long time.”
The bottom line, Dotzour said, is there are plenty of reasons for optimism about the economy despite government’s stumbles.
“Our economy is growing even with what’s happening in Washington, D.C. It should have grown even faster, but the reason it hasn’t is our government,” he said.
The country has had “exceptionally tepid job growth,” Dotzour said.
One problem with limited growth is that regulators have made it difficult for banks to loan money for new subdivisions “because they lost a lot of money six or seven years ago,” Dotzour said.
“Government regulation is retarding economic growth. We have a lot of shortages of housing in many areas. That’s a threat to the economy.”
What makes Texas attractive to businesses is that “families can come to Texas and make a decent living without a huge wage they’d need in some other places,” Dotzour said. “If the price of homes starts to skyrocket, then that’s gone away.”
Average house prices in Texas were $169,900 five years ago, $197,500 in 2013 and haven’t dipped below $200,000 since October, Dotzour said. “This is a serious issue,” he said.
CAN END HERE
While more wealth is in the hands of the American people, the economy has become “bifurcated,” Dotzour said, meaning the wealthy have more disposable income, but that hasn’t expanded to many in the workplace, whose wages aren’t rising, which presents another concern.
“Sixty-five percent of the economy is based on you and me going to the mall and spending money,” he said.
“Americans are great at spending money — we’re world class at it, and we don’t tolerate deferred gratification.”
Americans are “back in the saddle again,” Dotzour said, noting that the net worth of Americans is at an all-time record high at $81 trillion.
The big problem with the economy is a divide between the haves and have-nots,” he said.
It has created a great divide in America, Dotzour said. “The problem is (prosperity) is isolated in smaller and smaller numbers of people.”
A big reason businesses aren’t hiring more people or expanding at a faster rate is uncertainty over the impact of the federal government on health care, Dotzour said.
“The good news you never hear about is there are 4.1 million jobs open today,” Dotzour said. “We have a labor shortage.”