Reuters reports that one of the U.S.'s leading economists, Harvard's Martin Feldstein gave a speech in Florida today in which he said that the U.S. faces a recession that could be "significantly more severe" than recent ones.
This is very bad news because Feldstein is the head of the National Bureau of Economic Research (NBER) which is responsible for determining when recessions begin and end. Not only that, but he is a Republican whose editorials are frequently in the Wall Street Journal. So for Feldstein to make this claim, he must have very compelling and irrefutable evidence on which to base his prediction. Given his position in the firmament of economists, It would be incredibly irresponsible for him to be exaggerating for effect.
Here are some of the scare quotes:
-
"The situation is very bad, the situation is getting worse, and the risks are that it could get very bad."
-
"There's no doubt that this year and next year are going to be very difficult years."
-
"The housing situation is getting worse by the day."
-
"There is a lack of confidence leading to a lack of liquidity ... without credit creation, we can't have economic growth."
-
"While inflation expectations are still relatively well contained, "you wonder how long that's going to last."
Although I have been posting along these lines for a while, I really don't have much to add. Because when these comments come from the mouth of Martin Feldstein, they must be all too real.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.











Reader Comments (Page 1 of 1)
3-14-2008 @ 9:02PM
jerry mcdonald said...
i hope all you Bush warmongers, wall street elitest, Free traders, and american traitors, enjoy what you have sown. When the steets are running with your blood, i will be blessing god.
3-14-2008 @ 11:55PM
m26 said...
Obstructing Demolishcrats must share a large, Large, LARGE part of this blame. What Republicans have done wrong is try to apease these socialists. Conservativism only works when conservatives are in charge and we have not had one since Newt.
3-15-2008 @ 1:42AM
DaveF said...
It wasn't the democrats that doubled the national debt, it was a republican congress and president. It wasn't a democrat that refused to support the American dollar or refused rational regulation over mortgage securitization. It wasn't the democrats involved in massive waste, fraud and abuse with no bid contracts at home and abroad in Iraq directed to republican led companies. It wasn't the democrats lying to start a war for oil in Iraq. The blithering incompetance is all republican they were the ones in control.
3-15-2008 @ 3:13AM
Thoth said...
Irresponsible economists and forecasters and the doomsday media .... fail to see that the economy could easily and rapidly improve if the Federal Government would act immediately and responsibly. 5 million new good paying jobs could be created tomorrow if Government and Industry would immediately act and work together on long term infrastructure projects, such as national mass transit, building schools, roads, bridges, etc. Boeing, Ford, GM, Chrysler, etc. could be a part of the solution and get large long term contracts. The Government should enact a bill that denys Federal, State, and Municipal contracts to Corporations that move jobs overseas or don't put the interests of American Workers first. The Health Care Crisis is not a COST or CRISIS ... it is the largest, easiest, and most blatantly obvious golden egg laying at our feet ... just waiting for a REAL LEADER to pick it up. There are 50 million willing and able customers who need and desire the very legitimate products/services of private healthcare and private healthcare insurance. The infrastructure is in place. We are paying the full cost already at county, charity, and public hospitals. Trillions of Government and Taxpayer dollars could be saved over the next decade. Stupidity is not conservative. Greed is not conservative. Theft and embezzelment are not conservative. $9 Billion went missing at Haliburton ??? $1 Trillion+ is missing at Pentagon ??? Hello ??? Bush Cheney & Company and that includes McCain must go. We must create jobs. We must build our future. An economist without solutions is not a very good economist and that is a big part of the problem in the US. Virtually every government program can be turned around to include proper incentives and disincentives. Social Security and Medicare projection problems can be easily solved. Mandatory private life insurance for all participants could eliminate Social Security Retirement funds being used as welfare. Mandatory private health insurance for all citizens would eventually eliminate the need for Medicare, Medicaid, and even most government Hospitals. The solutions are easy. Republicans and Democrats polarizing and labeling real issues and squabbling over non-issues are both part of the problem. Republican crooks like Bush & Company looking for ways to steal both legally and illegally the worker's & taxpayer's hard earned money is not the solution. Democrats wanting to give away the store with a free check for able bodied workers instead of a job opportunity is not the solution. We need REAL LEADERS with SOLUTIONS.
3-15-2008 @ 8:57AM
william lindblad said...
It took them long enough to figure this out!!!!
The simple answer is that this is not about Democrats or Republicans or who is in the oval office but about people, greed and lack of oversight and regulation. In short, stupidity. We had a gold rush in housing and when it collapsed, everything based on it fell into the hole.
3-15-2008 @ 9:09AM
billdollar said...
GOP lovers always have some lame excuse to explain how the Chimpy regime has NOTruined America! Well, they have bucko! They can't handle the truth as Jack Nickolson said! Weak sisters all!
3-15-2008 @ 9:50AM
johnaudio1 said...
A Nation with too many houses is NOT a poor nation. A Nation with poor government is our problem. We need to redistribute the wealth so those who have nothing but ARE willing to work hard CAN prosper. STOP being too greedy rich people and allow those who work hard to prosper... they are your customers of the future! Without them everything will have to be repriced! DOWN! Their credit and forcing them into pre-payment penalties and tricky interest rate schemes is causing this to happen. The BUSH process is show the child the candy and then place it behind the glass of greedy unregulated real estate - brokers - bankers - appraisors and trick them into dual language contracts and false teaser rates has done nothing but hurt this nation more than you can imagine. This is what greed brings.
3-15-2008 @ 10:28AM
arnie said...
Our government need to create a situtation with proper tax insentatives for business to move manufacturing from China back our north american continent to include Canada, Central and South America. This will probably stop our problem with illigal immigration. Most people I have had conservations with from mexico and some from central america do not really want to lieve their families and friends to come here. The cost increases from paying a respectable living wage (presently $5.00 day Mexico) in these countries will not drive prices beyond acceptable levels. But it will provide a positive economic stimulus to these depressed areas. Remember China supplied arms and military aid to North Vietnam during the conflict and was responsible for thousands of American deaths.
I have no personal ajenda against China but i do not believe they deserve all the positive spin offs from the American economy.
These changes along with a new major mass transet system for the country will stimulate the economy and reduse our oil consumption.
Arnie Borreson
3-15-2008 @ 4:12PM
Govt Baby said...
The problem here is all of you think the government should solve this problem. Pitiful whiners.
3-15-2008 @ 7:54PM
Common Sense said...
AOL and the media keep trying to erode the confidence of the American consumer. Why? So they can get a Liberal Socialist Democrat in the Whitehouse. Traitous and Treasonous.
3-16-2008 @ 10:10PM
kcoryms said...
We Americans are to blame for this mess. When everything is flowing along and looking good your all happy. But you have the blinders on and can't see what is happening around you. All the signs were there that this was coming over a year ago and now here it is. Use your own brain and quit relying on everyone else. Now maybe you can see just how useless your cell phones, i-pods, video games, big screen TV's and all the other crap the money was wasted on actually is. Who are you going to impress now?