JEREMY HOBSON: Let’s get some analysis now from Julia Coronado. She’s chief economist with the investment bank BNP Paribas and she’s with us every Monday. This morning she joins us now live from London. Good morning.
JULIA CORONADO: Good morning.
HOBSON: Well Julia what do you think about what Jeff was just talking about? Would these ideas spur job growth at this point?
CORONADO: Well, I mean, I think the piecemeal, the low-hanging fruit approach certainly could help somethings at the margin. I think the Summers proposal — you know I think we have to be careful here. We’ve tried a lot of these quick fix stimulus approaches. They really haven’t produced much. I think some of the issues we’re facing are a lot more structural in nature.
HOBSON: So if you were advising the president this morning would you just say, just sit back, don’t do anything? What would your advice be?
CORONADO: Oh absolutely not. I mean I think one of the things that policy makers can do is help reduce some of the fundamental uncertainties. So the Congress and the president have been haggling over the debt ceiling and the deficit issues. There’s issues around the implementation of Dodd-Frank. There’s issues around implementation of the health care reform. The sooner we get bi-partisan concrete proposals that address these fundamental policy issues, the less uncertainty there is for businesses and consumers and the more that they can sort of get back to work. And I think that is something the president could do that would be much more important on a longer term basis.
HOBSON: And does it matter what the outcome of those arguments are or do you just have to reduce the uncertainty and go one director or the other, or is business concerned that it will go the wrong way?
CORONADO: Well, I mean, clearly you do have to make the right decision and I think for example on the budget deficit issue there’s a general sense that what you want to do is address some of the longer term structural issues but you don’t necessarily want to bring the hammer down on the economy in the near term given the fragility of the recovery. So I think if they can implement some of these longer term issues to address the longer term budget deficit, that would help the uncertainty because it is true that uncertainty in and of itself just leads people to put off decision making. And that hurts the economy.
HOBSON: Julia Coronado, chief economist with the investment bank BNP Paribas, thanks so much as always.
CORONADO: It’s my pleasure.
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