Greenspan says we’re in a ‘pause’ in recovery

Mitchell Hartman Aug 2, 2010
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Greenspan says we’re in a ‘pause’ in recovery

Mitchell Hartman Aug 2, 2010
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TEXT OF STORY

Bill Radke: Former Federal Reserve Chairman Alan Greenspan has weighed in on the state of the U.S. economy, and most of what he’s expressed is worry. That’s even as the stock market and corporate profits
continue to rebound strongly. Marketplace’s Mitchell Hartman reports.


Mitchell Hartman: Greenspan famously coined the phrase “irrational exuberance” in the dot-com bubble, but he’s anything but exuberant about the current so-called “recovery.”

Alan Greenspan: I think we’re in a pause in our recovery-a modest recovery. But a pause in a modest recovery feels like quasi-recession.

Not always known for his clear language, Greenspan was clear on NBC’s Meet the Press that he expects unemployment to remain persistently high — 9.5 percent — for the rest of the year.

Greenspan’s one cheerful note: big banks and corporations are now in excellent financial shape, and the stock market continues to climb. He said that will do more for the economy than additional government stimulus efforts-supported by Democrats.

Critics question why Greenspan’s still influential, given his role in the lead-up to the financial collapse. But Greenspan also gave comfort to Democrats on the politically sensitive issue of extending Bush-era tax cuts. He said they should be allowed to expire, because they inflate the deficit and don’t pay for themselves through economic growth.

I’m Mitchell Hartman for Marketplace.

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