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Are we dithering too much in tackling our economic problems?
The President obviously gets the heat because we don’t have jobs. But it is not really a political problem. It is an economic problem. It is this balance-sheet recession that we are coming out of. The good news is that we have come a pretty long way toward addressing our balance-sheet problem. The bad news is we probably have another two or three years to go.
How can we move forward with the economic growth we’ve got?
I think the key from a policy standpoint is to keep growth positive by whatever means necessary until households are comfortable with their debt levels and can start borrowing and spending again. We were here in the Seventies. If you adjust inflation out, household debt was falling for years then, too. There was too much of it. Until that process is done, it is going to be a slow jobs environment. What is striking about the Seventies is that when that process ended in the early Eighties, I can remember reading on the front page of the New York Times that the unemployment rate was never going to come down to where it was before. And that was the beginning of the process as we fell from almost 10 percent unemployment down to 4 percent.
Did you adjust your GDP call after the jobs report?
We are looking at a very weak second half with most of the weakness in the third quarter. We actually have things getting a little better by Q4.