"I think a large number of Houstonians have not a clue how serious the financial meltdown in August was. And how that's going to continue to plague the U.S. economy."
Dr. Barton Smith is one of the leading economists in Houston. He says the nation hasn't yet seen the end of the subprime mortgage collapse in August. But Houston has escaped the worst of the financial woes hitting the rest of the country.
"The Houston real estate market is -- has not experienced the speculative bubble, prices are extremely affordable in Houston, we've got decent job growth in Houston right now thanks to energy. So the Houston housing market is not nearly as much at risk as other places. That doesn't mean that we will completely miss the bullet."
In fact, Smith, who is a professor at the University of Houston and director of the Institute for Regional Forecasting, says the very things working for Houston - housing and energy - are the things working against the rest of the nation.
"I've never been a super Alan Greenspan fan, but I think that Greenspan's assessment of a 50-50 chance of a recession in 2008 is probably accurate. I guess where I would place myself is a little bit more optimistic regarding the ability for us to avert a recession, but perhaps more pessimistic than others that it's going to take us a long time to kind of sort everything out and get back to normalcy."
Smith says he doesn't expect to see a normal U.S. economy again until around 2011. And even then, he says it's going to require hard work, fiscal prudence and probably some pain.
"Our memory seems to be a lot better if we've suffered a little bit.Î¾ And so if everybody gets bailed out then my guess is that we're going to turn around and get back into the same format very quickly."
Laurie Johnson, Houston Public Radio News.