Summers On Recession: "I Don't Think The Worst Is Over"

For this week's installment of their "Lunch with the FT" feature the Financial Times sat down with Larry Summers, director of Obama's National Economic Council, for a wide-ranging talk. When the conversation turned to the current recession in the U.S., Summers did not exude optimism:

Onward, then, to the toughest economic challenge Summers faces today: the recession. Here, Summers turns sombre: "I don't think the worst is over ... It's very likely that more jobs will be lost. It would not be surprising if GDP has not yet reached its low. What does appear to be true is that the sense of panic in the markets and freefall in the economy has subsided and one does not have the sense of a situation as out of control as a few months ago."

Read the rest of the interview.

Comments

[RoveRoveRoveYourBoat]

...our forefathers would not have suffered this swindler for long.

[Solja]

How would you know that? You don't.

[RoveRoveRoveYourBoat]

...I learned that at a local community college yesterday.

[Tperl]

Is that a prediction or a promise?

[DFL]

And whats the GOP answer to this? -lets bring back the Bush years!

[Solja]

Exactly.

They wish they could really bring Reagan back (to continue destroying this country).

[johnsonc20]

No need to bring him back - his economic allies are still in the White House. The Republicans put on a show of opposition, but the uber-rich are quite pleased with the brand new government they just bought.

[Osusuki]

That's right, Larry. The worst is NOT over, because Obama still believes your advice.

[Solja]

Anything is better than doing nothing, which is what Bush did since 2007, which the recession actually began.

[JohnSawyer]

Summers says: "...the sense of panic in the markets and freefall in the economy has subsided and one does not have the sense of a situation as out of control as a few months ago."

Possible interpretations:

Though the SENSE of panic and freefall has subsided, the REALITY of it remains.

and:

Though the SENSE of the situation is that it's not as out of control as a few months ago, the REALITY is that those who steered the economy into an out-of-control spin and smash against a wall, are now steering it carefully to the junkyard, where they will sell its parts for scrap.

[Jonni Rae]

Krugman and others agree that this will be a jobless recovery , whatever that means. We need a new Jobs Bill. Only jobs, and in all sectors, teaching, socialwork, daycare, nursing, IT, paralegals, researchers, on every level. Just create the jobs.

[PhilipTaylor]

Time to GAIN A DEMOCRACY:

1. Campaign Funding Reform - Ar!anna has a article on it!

2. Do away with the FED Reserve "Debt Generating System" that has taken America from the #1 Creditor Nation to the #1 Debtor Nation!

3. Force Wall Street Banks with greater than $5 Trillion in Toxic Debts as reported by the Office of the Comptroller of the Currency into Receivership with stakeholders paying off as much as available and write-off the rest.

Strong Penalty for taking campaign funds greater than $250 from one person, corporation, or lobbyist is just one sensible law!

[AngieMom57]

Totally agree, is it going to happen? Only if we the masses ORGANIZE!

[Solja]

Sorry, I disagree with all of that. I just don't want to write the many reasons why.

[RJII]

2nd stimulus goes directly to main streets pocket.

[Solja]

I hope they extend unemployment like next week 'cause mine just ran out. Now what? There are no jobs in this dead, industrial town I live in. Oy!

[davidwayneosedach]

He may be right. I guess we'll have to wait for the second stimulus program to kick in first.

[drkazmd65]

Probably david,

I would be 'nice' if they started spending that $500,000,000,000 or so that wasn't part of the ill-advised tax cuts.

[PhilipTaylor]

THE MONEY CLOCK

$306 to Wall Street for EVERY
$1 to Main Street

Bloomberg News says $12.8 Trillion to Wall Street from Bank Owned FED Reserve System and Treasury!

$50 Billion to Main Street so far!

Imagine where Main Street Manufacturing and High Tech and Green would be with $12.8 Trillion!

Jobs everywhere!

Foreclosures nearly eliminated as people have jobs!

Wall Street Banks go down and Main Street Banks and Credit Unions take up the SLACK!

Reverse the numbers and let the Wall Street Banks go down under the weight of $700 Trillion in DEBTS! That is 50 years of growth 100% allocated to Banks! 200 Years of Pain!

JPM = $88 Trillion in Debt
G0LDMAN = $47.8 Trillion in Debt

[AngieMom57]

I'm on a soapbox today, just finished reading and watching this "in our face" article:

The Great American Bubble Machine
Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression

http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine

So now Larry & Timmy might just want to use their God Given talents to play fair? One can only hope.

[confidance government]

Actually the Federal Reserve is even more so a bubble-machine, not to detract from the excellent investigative journalism that Mr. Taibbi has performed.

Look at how many people on the Board of the FED have backgrounds from Goldmann Sachs or similar banks; its honestly frightening.

[jekyll]

Exactly! The only way to stop the boom/bust cycle is to dismantle the FED and our fractional reserve banking system.

[Solja]

Anybody qualified enough to get those top government jobs came from the top organizations in the private sector. A person coming out of college would not qualify, and neither would someone with a minimum number of years in the field and a diverse portfolio. The large institutions attract the best and the brightest in the financial field so its inherent that the Fed & Treasury would employ such people. It's just common logic to me.

[confidance government]

No $hit, Summers?

By the way, we are in the process of hitting peak oil, and there is no way that alternative energies are going to fill the gap fast enough to prevent substantial contraction in our GDP, that plus our unfunded obligations and deficits, and the potential for the dollar to be eventually phased out as the world's reserve currency, means we are in for potentially a decade long depression with a healthy dose of inflation as soon as banks start lending again.

There is no way our government can insulate us from these shocks; pay off your debts and prepare for some long hard years ahead, start a substantial garden, and start meeting your neighbors for mutual support.

[Beerformyhorses]

And keep your guns in good working order, with plenty of am*o

[confidance government]

Even better is to know the soldiers and police officers in your area,when they start cutting their wages, they will need to make ends meet.

Also, distillation and growing green will be a way to have goods for barter.

[twofish]

Just wanted to remind everyone that if boob Reagan hadn't throttled all of Carter's alternative energy programs, we'd be a long way down that road by now.

[Beerformyhorses]

It's been said many times, but still holds true...having the foxes guarding the hen house is never a good idea..

[Beerformyhorses]

2010 approaches...if they're in, vote'em out..Gop and Dem alike..new blo*d, and new ideas are needed..not same old stuff, proposed by the same old h*cks..

[JohnSawyer]

Is that "hacks" or "hicks"? Same difference, I suppose.

[diffrntdrummr]

Dear Larry, As long as you and Timmy are in charge I KNOW the worst isn't over.

[watchTVgetSTUPID]

BINGO

[turfkiller]

Yes. We should bring back the republicans and we will learn the real meaning of deep new hole.

[DocSyracuse]

Booya!

[Chubbster]

Larry, you got that right.