•Ex-Reagan &Harvard Economist Feldstein Detects Risk of Double-Dip Recession in U.S.

Harvard’s Feldstein Sees Risk of ‘Double-Dip’ Recession in U.S.
Share | Email | Print | A A A

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3IpfKeeveVM

By Bob Willis and Betty Liu


Martin Feldstein: Former head of the National Bureau of Economic Research and Reagan administration adviser


July 21 (Bloomberg) -- The U.S. recession may not be coming to an end and there is a risk the economy may experience a “double-dip” contraction, said Martin Feldstein, a professor of economics at Harvard University.

“There is a real danger this is going to be a double dip and that after six months or so we’ll have some more bad news,” Feldstein, the former head of the National Bureau of Economic Research and Reagan administration adviser, said today in an interview on Bloomberg Television. “We could slide down again in the fourth quarter.”

The economy could “flatten out” or “even be positive” in the third quarter, and then it’s likely to contract again in the last three months of the year as the effects of the federal stimulus program wear off and companies finish rebuilding inventories, he said.

“There isn’t going to be enough to sustain a really solid recovery,” he said, even though recent data has provided some “good news” on the economy.

Feldstein said Federal Reserve Chairman Ben S. Bernanke, whose term in office as chairman expires Jan. 31, should be reappointed to a second four-year term by President Barack Obama.

Bernanke has “done a very good job and I think he should be reappointed,” Feldstein said. Bernanke is due to present his semi-annual monetary-policy testimony to Congress today.

Feldstein said Bernanke in his testimony today would have to “reassure the Congress and the public” that inflation won’t be allowed to get out of control following the reduction in interest rates and the addition of liquidity to credit markets.

He said there “are a number of technical ways” that the Fed can contain inflation and that it would be politically difficult to increase borrowing costs at a time of high unemployment, Feldstein said.

To contact the reporters on this story: Bob Willis in Washington bwillis@bloomberg.net.
Last Updated: July 21, 2009 09:36 EDT

 

Are you going to be posting this stuff up until we break 1400 again?

 

I will post relevant, timely and notable information at all times, high and low, as always.

Are you going to adopt guerrilla tactic, substance-less Landis type one liners, whenever I post something?

Now mods will be adding to this problem?

Please tell me this won't be the case.

 

There are lots of reasons we may have a recession within a recession. Government has clearly been manipulating the markets and manipulation doesn't work in the long run - otherwise the Soviet Union would have been successful.

In the 1930's there was a depression within a depression when in 1937 FDR raised taxes. Obama is looking to raise the top marginal tax rate by at LEAST 10 percentage points. The incentive effect of the alone will be bad news for the economy.

 

ByLoSellHi = doom & gloom insanity

 

Take that post, seal it with a kiss, and send it Martin Feldstein's way there chief...

 

Oh, C'mon. If you have an opposing view then post it and give us your reasons. What you posted is unhelpful. Nobody is going to disagree with ByLoSellHi just because you don't like him.

 

It's more laughable that that.

I've got a mod engaging in Landis-tactics (one liner, devoid of substance posts), and others assuming I'm Martin Feldstein! (p.s. I'm not nearly that old, never worked for Reagan, and don't teach economics at Harvard).

 

This is where the rubber will meet the road, IMO.

Tax increases, which are certain in 2010, will have a negative impact on the economy. Add in Obama's healthcare and cap & trade plans. If and when, those two pieces of garbage come to fruition and you have yourself the catalyst for a huge downturn.

 

BLSH, I actually agree with your view and I know Marty Feldstein's stance (the BBG article is, actually, rather tame and he's a lot more bearish in person).

However, you tediously and predictably only post news/info that's negative the economy. I don't know whether this reflects your views or you have some ulterior motive. Believe it or not, there's some good news out there, which you are ignoring. From bitter experience I have learned that ignoring reality, as you're doing, leads to bad trading decisions.

Personally, I have actually tempered my uber-bearish view on the US economy, as a result of which I stopped out of my puts on Spooz last week.

Just my Z$2c, if you care...