Q: Do you think we’re going to avoid a recession?
But there are recessions and then there recessions. The previous
two were short, and the most recent one was not only short but shallow.
I think that’s what really matters to people. The average resident
doesn’t distinguish between whether the economy is growing half a
percent or one and a half percent. That’s not their interest. It’s
more, how does this feel? Are conditions generally improving noticeably
or aren’t they?
Wow, that’s a pretty explicit admission from Gary Stern, president of the Federal Reserve Bank of Minneapolis. Stern is the co-author of “Too Big To Fail: The Hazards of Bank Bailouts.”
Stern suggested in an interview that the U."S. economy may face “subdued” performance for the next two quarters, with output that’s barely positive or barely negative."
You know, kinda like the last 2 quarters of 0.6% GDP.
I disagree with his assessment of the current environment being "similar to the early 1990s when “headwinds,” a phrase then Federal Reserve Chairman Alan Greenspan used to refer to the lenders’ reluctance to lend, weighed on the economy."
The rest of the interview can be found on the WSJ’s
Real Time Economic: Stern: Credit ‘Headwinds’ to Weigh on Economy Beyond 2008
Stern: Credit ‘Headwinds’ to Weigh on Economy Beyond 2008
Real Time Economics, May 13, 2008, 3:23 pm