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The Model Economist

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dr. mark dotzour, model economist


Much of my time is spent focused on reading and listening to Dr. Mark Dotzour, Chief Economist for the Texas Real Estate Center, the model which all economists on the national and local levels should emulate. Dr. Dotzour has never been overly optimistic nor overly panicked and he has been right on the money for as long as I can recall as he forecasts locally and nationally (many of his speeches are available here as proof). National commercial developers considering projects in Texas often attend Dr. Dotzour’s forecast meetings before making a decision on their billion dollar deals, I kid you not. Even the most pessimistic, the most well educated, and the most experienced still look to Dr. Dotzour who seems to be the only one with a crystal ball.

Take for example what he has to say about Texas right now, “people are still wealthy; this country is still strong; but people are taking a wait-and-see attitude. So far, we’ve been pretty immune [in Texas] to what’s going on at the national level. But we have got to be careful. We’re isolated from the national problems, but we aren’t immune to them.” Dr. Dotzour is famous for being Rusell Shaw- like in his honesty and he never paints a pretty picture if there isn’t one to be had.

Dr. Dotzour even goes out on limbs with suggestions that are not always popular with legislators. From the Temple Daily Telegram,

“We need a Texas corridor desperately,” Dotzour said. With a projected 13 million more people coming to Texas by 2030, he said the state needs more infrastructure to help ensure continued economic growth.

Regarding ethanol subsidies by the federal government, Dotzour said with a food crisis in 33 countries, using corn for ethanol doesn’t make sense ethically. He also said making corn ethanol is “absolutely wrecking our economy.”

“You put a third of our corn crop in the gas tank, and what happens? Corn goes up. Wheat goes up. Rice goes up. Oil goes up. The value of the dollar goes to nothing, and gasoline’s $3.50,” he said.

It’s Dr. Dotzour’s raw nature that makes him the perfect model for economic leadership and I see a big future coming his way, don’t you? Take time to go through his speeches and read about his forecasts, he really is candid and amazingly accurate.

Lani is the Chief Operating Officer at The American Genius - she has co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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11 Comments

11 Comments

  1. Andy Kaufman

    May 22, 2008 at 11:30 am

    Thanks for the heads up Lani. Always nice to find some new real estate economics to geek out on.

  2. BawldGuy Talking

    May 22, 2008 at 12:23 pm

    Though Texans don’t like to hear it, they’re fast becoming the Longhorn version of SoCal. That’s both good and bad, but real. Infrastructure is what has created most of SoCal’s problems.

    Texas has the opportunity to get ahead of the infrastructure curve, especially as it relates to their hiway system. Boise is now facing this, and realizing they’re just inches from becoming SoCal — Potato Division. 🙂

  3. BawldGuy Talking

    May 22, 2008 at 12:25 pm

    Didn’t mean to leave out Aggies. 🙂

  4. Jonathan Dalton

    May 22, 2008 at 3:13 pm

    But “our” market is different, Jeff … how many places around the country have you heard that one?

  5. Benn Rosales

    May 22, 2008 at 3:31 pm

    “people are still wealthy; this country is still strong; but people are taking a wait-and-see attitude. So far, we’ve been pretty immune [in Texas] to what’s going on at the national level. But we have got to be careful. We’re isolated from the national problems, but we aren’t immune to them.”

    That’s what we love about Dotzour, you’re never going to get a photoshopped image of the sky.

  6. BawldGuy Talking

    May 22, 2008 at 3:33 pm

    Jonathan — comes right after my favorite, when I was single. No, really Jeff, she’s got the best personality. You’ll love her.

  7. Barry Cunningham

    May 22, 2008 at 5:12 pm

    Maybe he can take Lawrence Yun’s job…have you seen the nutso forecasts he’s been lobbing up lately?

  8. Frank Jewett

    May 22, 2008 at 6:28 pm

    NAR market opinions, like the predictions of fortune tellers, are “for entertainment purposes only.”

  9. Lani Anglin-Rosales

    May 22, 2008 at 6:35 pm

    Although I’ve asserted that Dr. Dotzour has a crystal ball, we all know no one does but I would argue that of all the economists I’ve spent time following locally and nationally, he is the only one that is unapologetic about telling what he sees coming, good or bad and never aims to give a self serving assessment of any market nor does he aim to do a tap dance to entertain. I hope you’ll take the time to follow the link to read some of his works, he really is brilliant and no, I don’t personally know him.

    Hey Frank, who’s your favorite economist? 🙂 I’d love add one to my list that I follow!

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

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Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

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Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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