Greenspan: Economy should take off soon

[DS]

WASHINGTON - Federal Reserve chairman Alan Greenspan said yesterday that low interest rates, surging stock prices, and the tax cuts boosting workers' take-home pay this month should soon cause weak US economic growth to take off.

''We believe that we are at a turning point,'' Greenspan told the House Financial Services Committee.

The Fed chairman said that recent figures on jobs and production have been ''mixed,'' however, so that an acceleration in growth remains a forecast, rather than a reality.

http://www.boston.com/dailyglobe2/197/business/Greenspan_Economy_should_take_off_soon+.shtml

http://www.washingtonpost.com/wp-dyn/articles/A61636-2003Jul15.html

[SCDem]

1. People have been saying this for like a year now

Haven't they?

Unemployment higher than 6% but the economy is ready to take off???

I'm sure i am not the only one saying I will believe it when I see it.

[punpirate]

2. The key in this, I think, is mention of stock market prices....

That's what defines an improving economy for the wealthy, and that group's interests have always been in the forefront of both Greenspan's and the right's thinking. The rest of us will hang until they figure out that screwing the average guy will eventually hurt the economy that supports the wealthy.

[MUAD_DIB]

9. Traditionally stock market gains are usually

six months ahead of the boost that the job market would get.

Traditionally

Anything that this misadministration is doing, I think, flies in the face of tradition...and common sense.


I don't see "good times" comming that soon.


That's just me.

[peekaloo]

3. well, if that's the case

then I shall rearrange my sitting position to enable these monkeys to fly outta my arse!

[lanlady]

4. didn't Greenspan say a few months ago

that the tax cuts would NOT work?

[MUAD_DIB]

10. Yes he did.

Or better yet he thought that tax cuts would be a hinderance (paraphrase).

I think that they're scared and are saying what they are saying because they are left with little wiggle room.


Please tell me I'm wrong.

[sendero]

5. after watching....

... Greenspan predict 10 of the last 2 upturns, I'll withhold my glee until we see some concrete results.

Because as of right now, there are NONE, other than the stock market which could turn south at any time.

Thanks for your considered opinion, polyan.... Alan.

[Monte Carlo]

6. I'll believe it when I see it.

You're not the only one, SCDem. Believe me, I would LOVE to see it. I graduated last month, and I could really use a proper job right about now.

[radwriter0555]

7. Hey! Let's stand by to stand by and hurry up and wait for that

'economy to take off...' I thought it already TOOK off.....? what's the deal with THAT? Does he mean it DIDN'T?

[demnan]

8. Yeah you old fart - when pigs fly

Remember that book Bob Woodward wrote "Mestro" or something like that where he talked about what a genius Greenspan was? The premis was that Greenspan was responsible for the 90's economy boom, making Clinton look good when it was really Greenspan who was responsible.

Greenspan sure doesn't seem that smart without Clinton's good policies to make him look good, does he?

Hey Bob! You're a lousy journalist!

[paulk]

13. Greenspan was responsible for some of Clinton's success

with the economy. He convinced Bill that paying down the deficit was the way to go.

It's too bad that when Bush came into office, Greenspan reverted to more partisan ways and endorsed his tax cuts (at least the first round).

[robbedvoter]

20. Yeah, right! Clinton wanted to spend, spend spend (like a Dem)

but good old Greenspan twisted his arm and convinced him - yeah, Karl, that's the ticket!

[paulk]

25. what's your point?

There is some truth in that Clinton wanted to spend, spend , spend
(like a Dem) and Greenspan talked him out of it. Instead of firing off some stupid post to gain (I imagine) political points, investigate the original claim. You've got a search engine.

Use it.

[ProfessorGAC]

26. Any Data To Prove That?

Clinton ran in '92 on controlling the deficit. Do you have any proof that Greenspan advised him while he was still a candidate?

Didn't think so.
The Professor

[paulk]

35. here

http://www.businessweek.com/1997/28/b35356.htm
http://csmweb2.emcweb.com/durable/2001/01/17/fp1s2-csm.shtml


also an interesting interview with Leon Paneta -

http://www.pbs.org/wgbh/pages/frontline/shows/clinton/interviews/panetta.html

The meeting between Greenspan and Clinton in 1993 is well documented.
While appointments of deficit hawks like Paneta to his cabinet certainly indicated that Clinton placed a high priority on deficit reduction, it wasn't til after his meeting with Greenspan that it became the number one goal of his economic strategy, (replacing a middle class tax cut).

I don't have any proof that Greenspan advised Clinton while he was a candidate. I never said that Greenspan advised him while he was a candidate.

[ProfessorGAC]

37. I Think You Did Say That

Clinton RAN his campaign on the need to control the growth of the deficit. Your cites regard meeting after Clinton was innaugurated. Now you say, you didn't say he advised him before he was prez. Yes, you did.

By giving Greenspan credit for an idea that Clinton was running on 18 months before these cites indicate, you are saying that Greenspan had to give him the idea while still a candidate. You still haven't shown any evidence to that.

I don't doubt that at the time, Greenspan was a deficit hawk. I know that to be true. I've been doing econometric work to develop theoretical models in economics for 20+ years and i've known about Greenspan since the late 70's.

But, i would hesitate to give him credit for Clinton's deficit busting. Clinton and his advisers were campaigning on the same concept, and for the same reasons as Greenspan had in your cites, long before 1993.

Unless you can establish that Greenspan was advising Clinton long before he won the presidency, than you're statement regarding crediting him is specious.
The Professor

[ProfessorGAC]

38. I Think You Did Say That

Clinton RAN his campaign on the need to control the growth of the deficit. Your cites regard meeting after Clinton was innaugurated. Now you say, you didn't say he advised him before he was prez. Yes, you did.

By giving Greenspan credit for an idea that Clinton was running on 18 months before these cites indicate, you are saying that Greenspan had to give him the idea while still a candidate. You still haven't shown any evidence to that.

I don't doubt that at the time, Greenspan was a deficit hawk. I know that to be true. I've been doing econometric work to develop theoretical models in economics for 20+ years and i've known about Greenspan since the late 70's.

But, i would hesitate to give him credit for Clinton's deficit busting. Clinton and his advisers were campaigning on the same concept, and for the same reasons as Greenspan had in your cites, long before 1993.

Unless you can establish that Greenspan was advising Clinton long before he won the presidency, than your statement regarding crediting him is specious.
The Professor

[ProfessorGAC]

39. I Think You Did Say That

Clinton RAN his campaign on the need to control the growth of the deficit. Your cites regard meeting after Clinton was innaugurated. Now you say, you didn't say he advised him before he was prez. Yes, you did.

By giving Greenspan credit for an idea that Clinton was running on 18 months before these cites indicate, you are saying that Greenspan had to give him the idea while still a candidate. You still haven't shown any evidence to that.

I don't doubt that at the time, Greenspan was a deficit hawk. I know that to be true. I've been doing econometric work to develop theoretical models in economics for 20+ years and i've known about Greenspan since the late 70's.

But, i would hesitate to give him credit for Clinton's deficit busting. Clinton and his advisers were campaigning on the same concept, and for the same reasons as Greenspan had in your cites, long before 1993.

Unless you can establish that Greenspan was advising Clinton long before he won the presidency, then your statement regarding crediting him is specious.
The Professor

[paulk]

51. I never meant to imply that Greenspan influenced Clinton

before the '92 election. Or that Greenspan deserved all the credit for Clinton's economic policies.

I was responding originally to a post that trashes Greenspan - and I don't believe he deserves it. Greenspan definitely influenced Clinton's thinking on HOW to reduce the deficit. Clinton had wanted to invest in the economy - with jobs, education, health ins. reform. One of his main campaign promises was for a middle class tax cut.
After meeting with Greenspan, these things were abandoned in favor of a tax increase, an increase specifically aimed at reducing the deficit.

It worked, and I do think Greenspan deserves some credit.

He also deserves a lot of blame for Bush's first tax cut.

[The_Counsel]

49. Really...?

"Greenspan was responsible for some of Clinton's success with the economy. He convinced Bill that paying down the deficit was the way to go."

Really?

I seem to remember "paying down the deficit" being one of Clinton's campaign promises in '92. Were he and Greenspan discussing policy THAT long ago...?

[0007]

11. Didn't Paul O'Neill say the same thing years ago?

* * * * *

[ima_sinnic]

12. but Limbaugh "guaranteed" that "this is it"

2 months or more ago. I wish I'd been able to record him then promising that the economy was "definitely" now "recovered."

[JackSwift]

14. Nope, take home pay took a massive cut from Bush

by his overtime elimination regulation. Combined with the uncertainty of war, I see the economy tanking.

[CWebster]

15. Shades of

"prosperity is right around the corner."

[dweller]

16. That 'taking off' feeling

as in that 'soaring' impression as one jumps off a really steep cliff.

dp

[SoCalDem]

17. Sure...it'll take off... For the rich ones.:(

[paulk]

18. Greenspan lies like the rest of the Bush junta

"tax cuts boosting workers' take home pay" This is Bush admin. spin.
The tax cuts didn't go to the working class. And the wealthy have no incentive to invest their new found gains into production if no one is spending money.

Greenspan's only hope is to keep dropping short term interest rates to keep the real estate boom going. Once that bubble bursts, all the spin in the world is not going to keep our economy floating.

I expect we will see the economy go from "downturn" to "stagnant", at least in the short term. Now that the Iraq war is "over", consumer spending is bound to pick up a little. Also, it's vacation season, and gas is still pretty cheap. There are some fundamental problems that will prevent a real recovery, however, starting with the fact that the BushCo economic policies are (__fill in the blank__) insane?
unsound? wishful thinking? absurd?



ed:sp

[robbedvoter]

19. Aaaany daaaay noooow....

Like Colon Bowell, Greenspan is outliving his last shreds of credibility. No wander Andrea Mitchell is actually going after the news.

[havocmom]

21. "Stock surge"?

No economist, I, but couldn't a 'stock surge' be occuring because stocks have fallen so much that they are a good deal for the wealthy to pick up now?

Let me grab my tinfoil hat and venture to say that this was part of the plan. Joe Blow citizen was starting to horn in on the 'American Dream' and now he is SOL. Ownership of everthing is returning back to the top class, where they think it belongs.

Look for a lot of home mortages to go bad. When the ads on TV for second mortages stop, look out! When they get as many folks as possible to mortage their equity and the job market keeps getting worse, the money changers will own America. Wanna-be workers will be happy to send their sons and daughters into the army to work as security guards for Haliburton and the rest of the Korporations that have stolen America.

[ozone_man]

40. Stock surge was a war rally and pump and dump.

The insiders have been selling into this rally. It's topping now, ready to go back down, that's why I found this "stock surge" comment particularly misleading from AG.

[CMT]

22. tax cuts boosting my take home pay!! Only $5.19 Big Deal

that will get the economy moving. Greenspan has been saying the same thing for quite some time.

[SoCalDem]

24. Neener..neener.. we got $7.10 ...:)

That's a WHOPPING $369.20 per year.. Woo-Hoo.. Our old age is now sevure :eyes:

[jayfish]

28. Good Thing... I Just Found Out Today That My Health Insurance...

"contribution" is going up over 150% per month, from $50.00 per month to $126.00 per month. Thank god for the bush taxcut, now I can become a contributing member of the economy again. !NOT!

Jay

[Tracer]

23. Joshua Bolton was on the NewsHour last night ...

... bloviating about how the 2001 tax cuts lifted the country out of its "shortest, shallowest recession".

I nearly gagged.

[northzax]

41. no, he's right

we went from the shortest, shallowest recession in history right into a deep blue funk.

The market is rising on speculation. it's shaping up to be a bubble again, alas. look out below.

[Chicagonian]

27. The Economy will take off when:

the Government hits the top 5% with serious tax increases, and uses the money to fund large infrastructure projects- including high-speed rail, de-salinization plants and modern-day "aquaducts", solar/wind energy plants, and developing a replacement for the internal-combustion engine.
The Economy takes off when new industries and/or new energy sources are created.
Legalization of pot, and especially of industrial hemp will create new "industries" and opportunities for entreprenuers, as well as bringing in many billions of dollars in tax revenue, and reducing expenditures related to policing and incarceration associated with current laws.
Legalized prostitution would see simmilar benefits related to increased tax revenues/decreased enforcement expenditures.
With gambling/alcohol already legal, it makes no sense for pot/prostitution to be criminal.

Theses are some of the things that I feel will be future stimulants to the economy, (as well as health care technologies related to prolonging the lives of the baby-boomer "haves")...What kinds of things do you see driving the economic engine of the USA of the future?

[realFedUp]

29. Buying those school supplies and uniforms

should really launch it....:eyes:

[ozone_man]

30. I hope someone keeps a record of these predictions.

"Surging stock prices" are soon to be replaced by plumetting stock prices. I think he is probably right, except that the "turning point" will be a turn down for the next five years or so.

[hadrons]

31. Greenspan needs to remove those rosy glasses he's wearing ...

[peterh]

42. I think he just took the glasses off….

Here he is, not being every optimistic….it seems that ever so widening deficit may be the little twit’s Achilles heel.

<http://www.newsday.com/business/printedition/ny-biz-greenspan0716,0,2741385.story?coll=ny-business-print>

Greenspan: Deficits Will Harm Economy

[LuminousX]

Yeah, ok

Talk to me when we have unemployment numbers like we had when Clinton was President. Talk to me when skilled laborers are fully employed. Talk to me when people aren't afraid to buy houses anymore for fear of being laid off and not being able to pay the mortgage.

The economy might be ready to take off, for all those people who own a ton of stock in a few blue chip stocks.

[leftyandproud]

32. sure it will!

[gratuitous]

33. Is that "soon" as in . . .

When we all close our eyes really hard, believe that fairies truly exist, and clap our hands? {Tries it, opens eyes} Hey, my wallet's gone!

[UpInArms]

34. I have thought about this statement

"the economy should take off soon" for a bit and I have finally been able to make it make sense

Yes, the economy should take off soon and move to China, India, Japan - anywhere but here -

our economy has taken off and left us in the dirt

we are becoming Argentina - the middle class will soon see what has happened -

:(

[PATRICK]

36. Prosperity just around the coronary

But businesses are not convinced, and will not rehire at old levels after being stung so bad in any event. At best a long, sour, rich man's bull**** market with more people channelled off into wars, prisons, poverty and lousy education. Those that have jobs overworked with eroding rights, benefits, no unions, no government protection and no security.

Why does Greenspan sound like Nostradamus without the dire, interesting catastrophes?

Sounds like something I can enthuse about. Yippee.

[psychopomp]

43. So true, so true...

But, truth be told, this was was well underway in the early nineties. Temp staff and contracting became a mainstay of the "new economy." I graduated right into it and spent several years uninsured, paycheck to paycheck.

I remember reading Marxist theory (though I will not say that I remember the "theory" beyond the basics; it can get pretty abstruse) back in university and dismissed it after a couple of years. Now it is looking more prescient.

Somebody had better think of a way to implement sensible growth, a means that preserves the environment and ensures individual and family security, and soon.

[psychopomp]

44. weird dupe error

!

[psychopomp]

45. triple post

mods, I hit the trifecta!

[w4rma]

46. Greenspan is trying to create a bubble. I see 2nd depression... (n/t)

[stevebreeze]

53. price to earnings ratio on the market as a whole is about 19

still far above it's historical levels of about 14.5 on the high end. People are buying stocks because they are looking at the new tax advantage, not an increase in earnings.
bubble bubble toil and trouble.
:kick:

[PROGRESSIVE1]

47. Greenspan: Economy should take off soon:

right into a DITCH!!!

[Fovea]

48. sounds like irrational exhuberance

to me.

[indigo32]

50. Did anyone hear Rep Bernie Sanders question him?

He reamed him a new one.

http://www.marketplace.org/shows/2003/07/15_mpp.html
check the newscast... you don't have to listen to the whole show.

[twilight]

52. riiiggghhhttttttttt ...

Got my flight suit on and I am READY ...

Bring 'em on Greenie!! Bring 'em on!!!

:dem:

[Avalon Sparks]

54. Yah - whatever.

"tax cuts boosting workers' take-home pay this month ...."


Yah, right. My husband and I both make in the low 40's and the tax cut gave us back about 60 dollars a month.

We were also informed that we will have to start paying out of our own pocket for water and trash pickup for the townhouse we lease - and that comes to about 60 bucks a month. The management company states that the bills are becoming to high for them to pay, and the during the Bush economy they have also lost renters...

In my pocket and right back out again.

Tax cuts for middle class are a Republican fairy tale.