Path Home Shows 2016 Show Archive January 2016 Show 1601 Lowell Catlett - Oklahoma’s Economy Is Strong

Lowell Catlett - Oklahoma’s Economy Is Strong

Respected economist and noted futurist Lowell Catlett believes our country’s economy is much stronger than most Americans think.
Lowell Catlett - Oklahoma’s Economy Is Strong

Lowell Catlett - Oklahoma’s Economy Is Strong

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Lowell Catlett, Ph.D.

State of Oklahoma

Oklahoma Economic Indicators

Show Details

Show 1601: Lowell Catlett - Oklahoma’s Economy Is Strong
Air Date: January 3, 2016

 

Transcript

Rob McClendon: Well, election years are always interesting when it comes to economic forecasts, especially those forecasts made by the candidates. It’s good to remember we live in partisan times, and when you see something on social media or even some cable networks that’s too dire or even overly rosy, there’s probably a hidden agenda behind it. That’s why I think you’ll find my next guest fairly enlightening. Lowell Catlett is a respected economist and a noted futurist who believes our country’s economy is much stronger than we give it credit for. And I was able to sit down with him shortly before he spoke at Oklahoma State University.

Rob McClendon: Well, Dr. Catlett, we’re in this time that we seem to hit every few years, and it’s election season, and everyone, there’s a lot of political rhetoric out there, and depending upon who you listen to, you know, our economy is, is headed for the dumpster or it, it’s booming. And I know there’s, there’s some middle ground in there between. What do you see?

Lowell Catlett: It’s the best time ever in terms of the economic activity that goes on. We’re a strong $18 trillion-plus economy, OK. We started in 1970, and we became the world’s worst winter in our economy, OK. So we’ve grown 18 times since 1970. China, which has been the fastest growing economy for the last decade, grew 19 times. So they grew but we’re still, as we were in 1970, we’re still 1/4 of the world’s economy. But the world is growing, and they’ve got more money – that’s the main thing. So they want air conditioning. They want more meat in their diet. Nobody can provide that meat better than we can. Nobody can provide those air conditioners. They want safer products, cleaner air. So we’ve got a staggering world wealth. And the United States, published every month by the Federal Reserve, calculates the net worth of America. The last one that was done, two weeks ago, the net worth of our 121 million households, at $87 trillion. So can an $87 trillion economy handle a debt load of roughly the same amount as our GDP – $18 trillion? Well, in the business world that’s a pretty good debt to equity ratio. So overall we’re a growing economy. Overall we’ve never had more net worth. Never. Never in history. Which means, guess what – you want maybe private school for children, when the previous generation went to public school. Maybe you want a bigger house. Maybe you want two houses now, you know. It’s driving a whole mechanism of new products. In 1970, we had zero craft breweries in America, now we have 4,000. You don’t want a beer anymore, you want a craft beer that’s made local. And that can only be sustained by wealth. And it’s a phenomenal wealth that’s driving so many different economic entities and segments of the economy. It staggers the imagination, but it’s there. It’s good, OK. And strong.

Rob: And while a raising tide does raise all ships, are, should we have worries about income inequality here in this country?

Catlett: Well, there’s no question but what we’re approaching where we have the greatest income inequality where the 1 percent control 21 percent of the wealth, and that was in 1929. And we’re at 19 percent right now, OK. So, 1 percent, the 1 percenters as we call ’em, control 19 percent, or have 19 percent, of the wealth. The real question is for us other 99 percent – is that 81 percent left giving us a good life? We go back to 1929, few homes had running water, few homes had a telephone, few homes had a car. Life was pretty tough, and the average life expectancy was 46. Now, it’s almost 80. The average person who lives in poverty has more dishwashers, washing machines, color television sets, every appliance that makes their life better than the average American had one generation ago. So, yeah, there’s inequality, but the real question is what does the other 99 percent have? And they have the best life they’ve ever had in history.

Rob: Let’s talk a little bit about workforce. There’s a concern here in the state, and I know around the nation, about a skills gap, that we have more jobs in certain areas that people are not qualified for. And I’m not talking about Ph.D. level degrees. I’m talking about certain specific skills. Is that a concern as we, as our economy matures and as the workforce matures?

Catlett: It’s a concern of mine because I’ve been an educator my whole life. And I agree 100 percent that it’s one of those what we call structural changes that we’re just trying to, trying to catch up on. The good thing is that we’ve got technologies now called augmented reality that were used for years by certain industries. For example, a pilot now is trained and gets lots of hours in a simulator because the simulators are so good. And then we let them go to the very expensive equipment. So now we’ve got, and the good, the new science of education says that about 100 hours in a simulated environment gives you a skill set to operate and do things that would have required a thousand hours before. So now you’ve got the ability to learn faster, and mistakes are less costly. So we’ve got a good model that basically says, yeah, we’re short of plumbers right now, we really are, but there’s a technology instead of five years of an apprenticeship with a plumber, we’ve got a technology that can get you rapidly up to speed to be a helper that may shorten that to two years, OK. So I’m very hopeful about it but, man, we’re in a structural, and the big one is, as we all know is, we’ve got, and have had for 20 years, almost 60 percent of the students now going to college are female. We’ve got a real underemployment of males because, and I think it’s wonderful for females, they’re now the majority in veterinary schools, the majority in medical schools, the majority in law school, majority in CPAs, 38 percent in engineering. They’re growing, but at the same time, men are more interested in kind of hands-on. So they’re less inclined to go in the traditional routes and more inclined to go into what we would call the trade associations. Well, with new augmented reality, we’ve got a way to rapidly get them a skill set that we never had before, if we can get it done.

Rob: So it sounds like the next big thing is not only technology but how we relate to that technology.

Catlett: Totally. Totally. It’s always been the case. It’s always been the case, OK. And technologies don’t always necessarily come without a dark side. None of us is gonna give up the automobile but 32,000 people die on the roads every year. But that’s why we’re working towards, guess what, it used to be 56,000 20 years ago. More people died on the highways from automobile accidents than died in the whole Vietnam War in a single year. So it pushed us to passive restraints, air bags, and the next layer is, guess what, totally driven cars. I mean, boy, Tulsa wants it. General Motors says it’s No. 1 priority. Thirty-eight hundred miles without a single accident coast-to-coast, totally automatically driven General Motors car last year.

Rob: Certainly would make the commuting a little bit different.

Catlett: It will. And you might want to have a beer while you go.

Rob: [laugh] I never thought of that.

Catlett: [laugh] So, it’s one of those things that it has a downside, but because that downside was so severe, guess what, we worked on other technologies to make it less severe. And you’re seeing traffic deaths gradually decline because it was actually technology that we’re not gonna give up, and we’ll put up with it simply because it adds so much value in other ways.

Rob: Yeah, and it really does bring me to one of our, if not our major economy here in the state, and that is energy. What could driverless cars, whether they’re powered by electricity or nitrogen cell, what could that mean for the energy industry?

Catlett: Well, it means that the energy industry to me is, to do all the things that we talked about requires energy in phenomenal magnitudes, OK. And it has to be mobile and it has to be usable. And we’re gonna look at different ways of doing that. It may be that we’ll move more toward electric vehicles, but you still have to charge those things. So we may charge ’em by very efficient solar cells. We may charge ’em by wind. We may charge ’em by stripping out petroleum into other component parts and using it to create little small fuel cells, I don’t know. But energy, the demand for it, is gonna explode – it already is, OK. It’s just gonna be in multifacets. And as we learn more about each one, we’ll do it. And we sometimes discard some. We’ve discarded a lot of coal plants to try to meet emission standards. But SaskPower in Saskatchewan has a coal-powered plant that basically meets the same stringent requirements we have in the U.S. that can only be met with natural gas, and they’re doing it by coal. So they’re using technologies in way that nobody thought possible. So, if you’re creative enough you can do it.

Rob: You know, we often refer to universities as institutions of higher learning and just that institution world, word, means that it doesn’t change that often. Are we about to see a major revolution in education?

Catlett: We’re, we’re already in the midst of it because the generation that grew up with this basically says I’m used to this size screen – I’m not, I want a big screen. But they’re used to this screen. They’re used to reading on it now. They’re used to playing games on it. They’re used to augmented reality. They’re used to it. And they’re used to being connected. So are they pushing us? You bet they are. So is the traditional classroom gone? No, because some of the things that we learn have to be about humans. They have to be about body language and some of those things. We have to be around humans.

Rob: Now, in the coming weeks, we will be bringing you more of my conversation with Dr. Catlett as we look at the future of both food and medicine.