Mark Zandi, Chief Economist for Moody’s Economy.com, says the current economic recovery is “fragile and tentative” and thinks the risk of the country slipping back into recession is “uncomfortably high.” He believes this because although employers have slowed down layoffs, they have not begun to hire aggressively. (0:25)
Federal Reserve Chairman Ben Bernanke says that although the economy is recovering, economic growth will be moderate and increase very slowly into 2010. (0:24)
Federal Reserve Chairman Ben Bernanke says the recession is over but its effects will still be felt in terms of job security and wages. (0:20)
Federal Reserve Chairman Ben Bernanke said Tuesday that regulatory problems were a large part of the world-wide financial meltdown and that he believes reform is necessary. (0:43)
Leah Valencia, University of New Mexico-Talk Radio News Service
Federal Reserve Chairman Ben Bernanke announced the end of the recession Tuesday, but conceded that the U.S. will continue to feel its effects.
“From a technical perspective, the recession is very likely over at this point,” he said. “[But] it is still going to feel like a very weak economy for some time,” said Bernanke during a speech at the Brookings Institute.
Bernanke warned that though the U.S. is leaving the recession behind, unemployment and low wages will continue to take their toll. He added that markets will remain weak through 2010, because economic growth will not be strong enough to create jobs.
“Unemployment will be slow to come down,” he said. “It will come down, but it may take some time.”
The bankruptcy of the Lehman Brothers occured exactly a year before Bernanke’s speech on Tuesday, marking the worst phase of the global financial crisis.
Bernanke said regulatory reform is needed to ensure that a crisis such as this does not reoccur.
“This has just been too big of a calamity and too serious of a problem.”
President Barack Obama delivered a similar message during a street to New York’s financial community Monday.
While there has been some debate among policymakers over whether effective regulatory reform can make it through Congress, Bernanke remarked Tuesday that he was hopeful.
“I remain pretty optimistic that… reform will be forthcoming,” Bernanke said.
The Bureau of Labor Statistics Commissioner, Keith Hall, says that minorities and the uneducated continue to suffer the most job losses, a trend that parallels unemployment statistics prior to the recession. “The trend is pretty much the same,” Hall says. “When the overall unemployment rate goes up, it goes up by more for the minorities.” (0:18)
“The extraordinary policy measures we have taken in response to the financial crisis and the recession can be withdrawn in a smooth and timely manner as needed,” Federal Reserve Board Chairman Ben Bernanke said to the House Committee on Financial Services Tuesday. (0:33)
By Annie Berman — Talk Radio News Service
Federal Reserve Chairman Benjamin Bernanke testified before the House Budget Committee today concerning the current economic recession and warned that the retirement of the baby boomers and an increase in medical and entitlement costs makes it more difficult for the economy to be restored.
In his opening statement, Bernanke said that “Our expectation is that we will begin to see growth in the economy, so, at the end of the technical recession later this year. Underlying that prediction is some stablization in final demand, including consumer spending.”
Though there is hope that we will begin to see our economy turn around, Bernanke stated that unemployment rates will continue to rise into next year.
The American Recovery and Reinvestment Act (ARRA) was enacted by Congress and signed into law by President Obama in February 2009. This act is intended to provide stimulus to the US economy and is worth $787 billion. It includes federal tax relief, unemployment benefits, and domestic spending on education, health care, and energy.
Bernanke said, “by the end of 2010, the stimulus package (ARRA) could boost the level of real GDP between about 1 percent and a little more than 3 percent and the level of employment between roughly 1 million and 3-1/2 million jobs.”
Recently, the credit markets have also taken a downturn, one of the worst since the Great Depression. When Bernanke was asked by the committee how long it would take for additional credit to be made available to consumers and small businesses he said that though this group rely heavily on bank loans, banks have been reluctant to extend credit because they are concerned about their own financial positions.
“We’ve heard complaints that bank examiners from the Fed and other agencies are too prone from preventing banks from making loans, in the interest of safety and soundness… Making loans to credit worthy borrowers, maintaining credit relationships, is profitable, for banks and therefore good for banks,” Bernanke said.
To avoid the another recession as large as this one, Bernanke stated that there needs to be a stronger oversight of large firms, resolution regimes to help resolve failing firms, and to strengthen the financial infrastructure.
By Courtney Ann Jackson-Talk Radio News Service
We can’t let things go back to the way they were with the United States Financial System according to Treasury Secretary Timothy Geithner Monday. Geithner joined Newsweek Magazine editor, Jon Meacham, at a luncheon interview on the topic of the recession and what American’s should expect as the steps to recovery continue to be put into action.
“This is still the most challenging economic crisis that this country has seen in generations. It took a long time for these problems to build up,” Geithner said. “It’s going to take time for us to work through them. We’re not going to have a steady, even process of repair, it’s going to be bumpy, still feel fragile for a while.”
Geithner expressed his sympathy for struggling Americans and said he understands why Americans are angry. He said that even as growth inevitably begins to turn positive, unemployment will continue to increase for awhile. He also said, “It’s not going to feel better for a long time for millions of Americans.”
As the administration continues to work its way through this economic crisis, Geithner believes they need to take a “fresh look” at the financial system as a whole. In terms of speed and quality of initiative that are already in progress, he said he thinks the administration is doing well.
“The American people want to see us moving to change things, not just waiting and hoping,” he said.
Meacham asked Geithner about people’s critique that the administration was being too lenient. Geither replied, “I actually think that what the President has put in place is the most aggressive approach to solving a financial crisis than we’ve seen from any serious country in a very long period of time.”
He also noted that they are doing more preventative work and referred to it as a type of insurance from a greater recession. They are working to make the system more stable and plan to release a new set of proposals in the next few weeks for reforming the oversight framework.
By Courtney Ann Jackson-Talk Radio News Service
Treasury Secretary Timothy Geithner speaks at the luncheon hosted by Newsweek Monday focused on “Recession and Recovery: The Road Ahead.” Geithner understands where the frustration with the crisis is coming from and lays out the way in which the administration is dealing with it. (1:29)
