[Scott] Pelley: How would you rate the likelihood of dipping into recession again?
[Ben] Bernanke: It doesn’t seem likely that we’ll have a double dip recession. And that’s because, among other things, some of the most cyclical parts of the economy, like housing, for example, are already very weak. And they can’t get much weaker. And so another decline is relatively unlikely. Now, that being said, I think a very high unemployment rate for a protracted period of time, which makes consumers, households less confident, more worried about the future, I think that’s the primary source of risk that we might have another slowdown in the economy.
Pelley: You seem to be saying that the recovery that we’re experiencing now is not self-sustaining.
Bernanke: It may not be. It’s very close to the border. It takes about two and a half percent growth just to keep unemployment stable. And that’s about what we’re getting. We’re not very far from the level where the economy is not self-sustaining.
The debate on Capitol Hill this week is over whether to extend the Bush tax cuts, which would likely increase the budget deficit.
If this is the best we can do for a Fed chairman, then we probably are in serious trouble. If I were President, I’d ask him to resign.
If you were President, David, you would work to the benefit of a country you love and respect. Such is not the case with this fellow.
It’s a revealing article. He’s a lot clearer than his predecessor – and he’s got a lot more work to do since the congress doesn’t have the political will do to what is necessary to stimulate the economy.
He does make some interesting remarks about inequality. We’re in an age, perhaps, where the plutocrats are the least patriotic of any generation.
I don’t envy his job. I’m sure plenty of commentators think they could make changes that would instantaneously drive the economy – like magic (just implement even more tax cuts, for example). But since the rich are hoarding, and not spending, I’m skeptical that would work.
The fed has little it can do. It’s already giving out free money, and we’re still in a deflationary situation. I’m mighty curious to see what other people suggest.
stunning arrogance – this from the same guy who assured us that the sub prime problems were isolated from the rest of the mortgage industry is now convinced there will be no double dip.
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“It doesn’t seem likely that we’ll have a double dip recession. And that’s because, among other things, some of the most cyclical parts of the economy, like housing, for example, are already very weak. And they can’t get much weaker. And so another decline is relatively unlikely. ”
Sounds like he’s admitting we’re no longer in a recession, we’re in a Depression.
I would argue that for most Americans, we are still effectively in a recession. Unemployment is near 10%, underemployment is just as high, commodity prices are jumping significantly (oil is nearing $100/barrel again), home prices are still weak, businesses aren’t hiring, government regulation is hurting small businesses while protecting the big guys that got us in this mess, “quantitative easing” is eroding the value of the dollar, manufacturing jobs have been outsourced and replaced by minimum wage jobs, etc. Just because Goldman Sachs is having a great year doesn’t mean we aren’t in a recession, but then again, the Fed tends to create policy that helps Wall Street. My view on the Fed is very negative, and I really hope Ron Paul continues to pressure Bernanke.