Martin Feldstein: Wall Street Rebound Doesn't Mean Crisis Is Over

Agence France Presse:

FLORIANOPOLIS, Brazil (AFP) -- A few recent glimmers of economic hope emerging in the United States do not mean the global crisis is over, a top economist who advises US President Barack Obama said Saturday.

The crisis "is certainly the worst that I have seen in my career," Martin Feldstein, a 69-year-old Harvard economist and member of Obama's Economic Recovery Advisory Board told a world tourism conference in Brazil.

Read the whole story: Agence France Presse

Comments

[themodernleader]

Martin Feldstrin is on the President's economic recovery team and is blasting the Administration's policies towards a recovery. Why?

[FairTalk]

I cannot understand folks who want to prevent deflation, but oppose paying fair wages with benifits, are sympathetic to illegal immigration, ignore the need to employ inner city youth as opposed to building more jails, expect gov bailouts for wall street but not social security, and then, when stock market goes up, think the crisis is over.

Here it is by the "numbers..­." average yearly income in Boston area, $46,000; average price of house or condo, dropped recently from $350,000 to $250,000.

So, you see, the averge wage earner still cannot afford to buy the average condo.

Now I ask all you expert economists out there: what kind of plan is that? We "permit" the construction of 85% of new homes/condos to be sold to 15% of the population. Now, is that a sustainable economy?

Please explain this to me.

[LHoney]

The uber-wealthy have destroyed this country. President Obama needs to tax the daylights out of that one percent crowd and fix this mess. I think that's the only way but unfortunately, it will never happen. Maybe the Bilderberg meeting this weekend will come up with an answer... I shudder to think.

[Liberal2]

Precisely.

History proves a nation can't turn itself around until the wealthy are made powerless.

[epenstien]

Soros ain't givin up no money,the Banking Democrats and Big Business like GE,ain't given none either.Con­gress will vote themselves money,and we will pay for all of it. Just pay and keep your yapper shut

[epenstien]

You just voted to give Big Business,and Congress the most power they could ever want.

[epenstien]

You have voted for the people to be powerless,and you have led us closer to CIVEL WAR

[Hailmaryyy]

Dr. Feldstein is right. The economy is still decliining and things are much worse outside of the U.S. What we need are new policies that can help the country emerge from the depression it has entered.

"How do you solve a problem of a huge hole in purchasing power and large scale permanent unemployment? You have to think way outside the box. If this crisis was solvable by an existing theory championed by the left or the right it would already have been solved. First and foremost purchasing power has to be returned to the bond market. There are three ways to get there from here. First, take the time to earn and save the trillions and trillions of dollars that have been lost. This will take a very long time in a depression. Second could be to return to a system of a highly risky financial system supporting 30 to 1 leverage. Finally, the federal government could create more money by printing it. By my calculations the federal government needs quantitative easing of at least $10 trillion focused on purchasing U.S. Treasury bonds. No this will not create hyper-inflation despite the cries of the sky will be falling crowd as informed on history as Chicken Little."

http://www.escapethenewgreatdepression.com

[epenstien]

Cut all taxes,and drop all entitlement programs.I don't have insurance ,but I'm smart enough to know the Free Market will cost me less,and low taxes will help me pay for it.

[Energizer2009]

For more on Feldstein, see:
A People's Guide to the Economic Recovery Advisory Board
http://twisri.blogspot.com/2009/02/peoples-guide-to-economic-recovery.html

Also see:
Adam Smith on the Current Financial Crisis - http://twisri.blogspot.com/2009/04/adam-smith-on-current-financial-crisis.html
What happened. What now. - http://twisri.blogspot.com/2009/04/commercial-and-investment-banks-used.html
Why the market failed - http://twisri.blogspot.com/2009/03/why-market-failed.html

[SwampeastMike]

While our headlong rush over the economic cliff has slowed, it has not changed direction. The highest officials in the treasury and federal reserve have shown only that they can prop up the existing, failed financial system, not that they can change the system in any meaningful way.

The only sectors growing in our economy are government and health care. (Education and entitlements being government by another name.) Sectors that even before the financial collapse were almost universally seen as both wasteful and growing at an unsustainable pace.

Without taxes to support government spending and with the cost of health care shifting further and further towards the it as fewer and fewer can afford insurance premiums, these already expanded bubbles will continue to inflate and rapidly pop unless something is done * S O O N* to change course and not merely apply the emergency brake.

Until we understand that as long as we have physical bodies a service-oriented society cannot survive without a substantial industrial base that produces many of the manufactured items commonly consumed by its people, We have far too many people who work to make money, not things.

[epenstien]

The crisis has just begun.The Obama budget and GDP growth is so far off its disturbing­.This country wont recover for 10 years after these social programs pass.

[sonofsamphm1c]

Can somebody provide any quotes from people who are actually saying the crisis is over?

The administration is preparing the 19 TARP recipients to sustain around 735 billion in losses.

[swo68]

"Martin Feldstein: Wall Street Rebound Doesn't Mean Crisis Is Over"

American People: Duh

[jerrypl]

Mr. Feldstein, where have you been? Rip Van Winkle woke up long before you have. Most of us tuned into this economic tsunami, which has been going on for a long time now, could have told you exactly what you are telling your French audience. Any bounce in this stock market has nothing to do with the real economy. The real economy is quickly crashing. It is happening in Europe, and it will smash down on China, too.

You would be best to wake up the sleeping Obama and tell him to cut off the zombie banks, tell them no more piggy bank raids, and they best go out and find investors in the private sector to bail them out, otherwise it will be receivership for the lot of them.

http://eye-on-washington.blogspot.com

[andycan]

WHO IS REALLY MARTIN FELDSTEIN
(A NEO-LIBERAL APPARACHIK)

Martin Feldstein.­.. along with Milton Friedman, Gary Beck, Alan Greenspan, Jeffrey Sachs - a pro-big business, small government, total deregulation fanatic: an influential Republican enforcer of aggressive "market economics" orthodoxy that brought the world to its knees, wrecked the lives of tens of millions, and made countless Wall Street operators enormously rich.

The Harvard professor could have the decency to shut up or at least confess his own guilt in the present mess.
The journalist who reported the story should also have offered some economic and historical perspective on the doctrinaire enforcer Martin Feldstein really is.

[FairTalk]

This is shocking! people are being forcefully removed from their homes every day in America!

http://www.youtube.com/watch?v=ubHlWjIGAfI&ytsession=m39DfPTAZDOcLZZPjA6uC6Cpoy5BiaNJ-6s6ZnNPzbhCRQdrXO6cQKO5bS2tfPaDsDsgihYQKisn2VLX6l8m-4BX_t6f8yvYlQWoBNYAtqZpNHDKjouK6GDC28NgZoz1UwRONbSjfIjXUKxGCwFTUubE_PcdCJ59sSs270f85lRckv-isoqPWnmMMpTxM2ooaJ6Kc6bS5sLbX8w7RtUws98DFweBieWd0boVYoOwfb8hxJlVdhX-gRRI8KZp8Z7C

[epenstien]

maybe they missed payments

[RofWH]

Rebound? What rebound?

[CarmanK]

It's the establishment and maintenance of an "economic aristocracy" supported by the repugs and started in earnest under Reagan that has destroyed the middle class and led to this nation's decline. From its roots, the republican party was in favor of federalism and the establishment of an aristocracy. They are the party of big business, big money. The Repugs couldn't get anywhere touting their business priorities, so they adopted fringe issues that would propel them to some kind of "champions" for people, all the while, diluting the rights of workers, busting unions, condemning intrusive government and blasting government workers as inefficient and a drain on the economy when they retire. Well folks, "economic aristocracy" is in direct conflict with a strong functioning democracy. A democracy serves many, while the aristocracy enriches the few. It is time for the Democrats to call the Republicans what they are: foremost voice of business in government.

[epenstien]

The market has hit a natural bottom,but Obama is causing the next downturn with Socialism.

[Layman23]

Will Faux News now display the upward pointing arrow and declare "People have lot of confidence in Obama" now ?

I believe they showed the down arrow all the time and our brilliant Niel Cavuto infamous for his musings as news had the caption "People losing confidence in Obama ? "

What a bunch of bigots !

[epenstien]

The smarter people with a knowledge of Economics do not have confidence­.The majority of Obama supporters wont turn on him until they are affected.

[epenstien]

What is Faux News,I dont watch TV.

[PhilipTaylor]

FED+Bush/Paulson pumped $11,500,000,000,000 of Welfare into Wall Street=Socialism!

Geithner+FED have dumped another $Trillion and plan another $Trillion soon!

Bush Doubled the National Spending on Health Care and doubled our National Debt=Socialism!

[epenstien]

I disagree with Bush and Bailouts.O­bama has just made a bad situation way worse.You keep saying what Bush did ,but Obama has tripled that.