Forbes is no stranger to economic predictions, the son of Forbes founder Malcolm Forbes and now the head of one of the leading financial publications in the world. He was a guest at a recent Greater Houston Partnership luncheon and says despite the perception to the contrary, the economy is doing just fine. "You look at polls and you ask most people how most people feel about their situation in life. Okay, not bad. American economy? Yuck, problems. You see it in the fears of inflation, you see it in the aftermath of the storms, you see it in uncertainties about how can this country compete with the rise of Indian-China. So there is a lot of uncertainty out there. But make no mistake, it you look at the fundamentals of the US economy, they are very, very strong," he says.
Forbes says record productivity, fueled by new technologies, will lead the nation into an economic expansion similar to what was seen over the past two decades. "There's no reason why this expansion shouldn't be as long lived and durable as the expansions of both the 1980's and 1990's," he says.
A strong proponant of a national flat tax, Forbes was unsuccessful in two bids for the White House, once in 1996 and again in 2000. He says Houston is set to take advantage of a growing global economy. "Houston is uniquely situated to take full-advantage of what is called globalization. But if you think about it, globalization has been really going on for several thousand years. Ever since we came out of caves we've been extending networks and expanding trade and interactions with one another. It is not a recent phenomenon, we're just more aware of it than ever before," says Forbes.
Forbes Magazine will feature Houston in it's April 24th edition, a time that will likely coincide with the Enron trial and the worldwide publicity it will generate. "A trial is going to take place in a few weeks, and that's going to, for at least a few weeks, obscure what an extraordinary city this is. But it is only temporary, and we think when this section appears, it will be perfectly timed to get the word out to the nation's business community and to the world what an extraordinary place this is," he says.
Forbes also predicts oil prices will dip to between $35 and $40 dollars a barrel within a few years, a significant drop from current levels, but not low enough to discourage continued exploration and production.