According to former chairman of the Federal Reserve Alan Greenspan, the U.S. economy has descended into a recession. While we still haven’t seen a decline in our gross domestic product (GDP) for two consecutive quarters (this is the definition of a recession), Greenspan argued that:
“Consumers are beginning to shrink in, the automobile markets are beginning to contract, production is beginning to ease, and we are in the throes of recession.”
But, according to Greenspan, none of the current woes are his fault:
“I have no regrets on any of the Federal Reserve policies that we initiated back then, because I think they were very professionally done.”
He went on to argue that the economy won’t stabilize until the housing market recovers, and that federal intervention will be required to speed that process along, much like what happened during the resolution of the savings and loan crisis during the 1980s.
8 Responses to “Greenspan Speaks: U.S. Economy in a Recession”
YOU KNOW ALAN GREEN SPAN /YOU AND BILL CLINTON/AMONG OTHERS /DID NOT JUST SCREW UP THE HOUSING MARKET /AND CAUSE THE ECONOMY TO FAIL / BUT YOU AND BILL HAD SO MUCH PRIDE /AND WOULD NOT PAY ATTENTION /YOU AND BILL BECAME PROFESSIONALS AT IT/EVERY TIME I SEE BILL CLINTON/ALAN GREENSPAN/JOE BIDEN HARRY READ/PALOSEY/OBAMA ON TV /I CANT TAKE IT I HAVE TO TURN THE TV OFF/OR CHANGE THE CHANNEL /THEY DONT MAKE BOOTS DEEP ENOUGH TO WADE IN THIS B/S
how the F do you get to call this a recession without the 2 straight quarters of falling GDP? I don’t care if we are “about to” go into one, we are not in one – yet.
Maybe they’ll just make up a new number or name for this, like “core recession” or some crap like that. Only the government can make up as much crap as they do.
Am I the only optimist here? I’d like to think that we really aren’t going to get hit hard. Sure, some groups are going to get bent over without the possibility of getting a hug or even a call the next day. But let’s face it – they probably don’t deserve it.
AndyS: Making more mortgage payments only helps you if you end up needing to sell your house, or are near the end of your mortgage. For people who recently bought a home, within their means, it’s wiser to save up cash than to put it towards the mortgage. That way, you will still be able to PAY your mortgage if something goes wrong (job loss, etc.)
I agree with the previous comments and Alan G’s comments – we are heading for a very rough time. This is the time you need to plan for the worst (eg having 50% in cash or investments outside the states). Make more mortgage payments if possible as well to give yourself a buffer as well.
I would’ve thought someone like Greenspan would be much more professional than this. Sounds like he wants to “protect his legacy.”
Oddly enough, Businessweek has Uncle Ben on the cover. Could Alan be jealous? Doesn’t he know the definition of recession?
Recession isn’t slow growth or even zero growth. It’s two consecutive quarters of negative GDP growth. So far, we are not in one officially. We’re definitely in one emotionally, though.
Good, at least we know they screwed us “professionally”!
Greenspan was a fool. It was his direct lending policy that caused the housing market crash. He has been declaring all of this as not his mess even before he left his position.
One thing he did do right, was to leave his position when he saw how much he screwed it up, instead of staying in to try to correct it. You don’t just leave Fed rates low for years, then hike it back up and leave office.
UGGHHHH, he even wrote a book about how it wasn’t his fault. I hope he takes his guilt to his grave.
This is just the beginning of a long recession. Just like the great depression started in 1929 and it took until 1931 for the stock market collapsed. 2008 is like 1929, just wait until 2011.