Quotes on the economy
Some quotes from the Senate Banking Committee’s hearing on the economy, with Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and Christopher Cox, chairman of the Securities and Exchange Commission:—”In part as the result of the developments in financial markets, the outlook for the economy has worsened in recent months and the downside risks to growth have increased. To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so.” - Bernanke.—”The softer labor market, together with factors including higher energy prices, lower equity prices and declining home values, seem likely to weigh on consumer spending in the near term. On the other hand, growth in U.S. exports should continue to provide some offset to softening in domestic demand. And the recently approved fiscal package should help to support household and business spending during the second half of this year and into the first part of next year.” - Bernanke.—”What we’re seeing is, as - although it was subprime that maybe produced the spark that created - that got this going, that we had a dry forest out there, because for some time we had a lot of - we had seemingly excess liquidity, low levels of inflation around the world, and investors reached for yield and mispriced risk in a number of markets. And so now what we’re seeing is a reaction, and the areas of the market that are under the most stress today are those that are the most complex products.” - Paulson.—”As you know, the commission is not a front-line regulator of the mortgage lending business … But the securities markets and the market participants that the commission does regulate, not to mention the investors whom it is our mission to protect, have been deeply affected by the problems with residential mortgage-backed securities and collateralized debt obligations.” - Cox.—”The current economic situation is more than merely a slowdown in my view or a downturn. It’s more even than a mere recession or a near recession, I might add. Instead, it’s a crisis of confidence, I feel, among consumers and investors. Consumers are fearful of borrowing and spending. Investors are fearful of lending. Financial transactions which generate new businesses and new jobs are shrinking in number and in size.” - Sen. Christopher Dodd, D-Conn.—”The Congress has already enacted and the president has signed an economic stimulus package.Even if every consumer spends their rebate check, I believe the impact to the overall economy will be negligible. I have equated it to pouring a glass of water in the ocean and expecting it to make a difference. I hope I’m wrong.” - Sen. Richard Shelby, R-Ala.—”If we just let things, sort of, work out over the next several months, there could be as much as a 20 to 30 percent devaluation in the value of homes in the United States, which some people have estimated to be on the order to $4 trillion to $6 trillion in household wealth. hat is going to be a huge shock to the quality of life of most Americans. It’s going to translate into whether children go to college or what college they go to. It’s going to translate into whether they’re prepared for retirement.” - Sen. Jack Reed, D-R.I.—”I just want to give you a heads up: When you see something coming, don’t put it off as the chairman of the Fed. Take action immediately, because this housing market has been coming to us for a year, a year and a half and we didn’t react properly to it.” - Sen. Jim Bunning, R-Ky.—”If I understand correctly, rebates will be issued only to people who file tax returns, but millions of eligible Americans who receive railroad retirement or Social Security retirement or disability benefits are not required to file tax returns. If they do somehow get word and do go to the IRS free file program, they’ll be kicked out because the software is programmed to prevent them from filing.” - Sen. Sherrod Brown, D-Ohio.
Tags: consumers, fi, job