Though the markets rose this week for a change and some big banks announced small profits, President Barack Obama's top economics adviser warned this morning that it's too soon to tell if the economic bottom is in sight.
"No one can make that judgment," said Lawrence Summers, director of the White House National Economic Council, on "This Week with George Stephanopoulos."
"I wish I could say that the fact that the stock market was up meant that the country was out of the woods or the fact that consumer spending had been strong meant that the country was out of the woods," Summers said.
He warned that the road to reviving the economy will be long.
"While there is signs that some of the things that the president is doing are starting to have effects, these problems did not get made overnight," he said. "They didn't get made in a year. And they're not going to get fixed very rapidly, either.
"Clearly, the fact that consumer spending was like a ball falling off a table through the holiday season and that there does seem to be some sign of stability in January and February is better than if that were not the case," he added. "But we've got an economy that's losing 600,000 jobs a month. That's probably not going to stop imminently."
On reports that Citigroup, Bank of America and JPMorgan have been profitable so far this year, Summers said that, while promising, the progress does not indicate that public trust in the banking system has been restored.
"There are very fundamental issues in the banking system, principally having to do with this very large quantity of so-called toxic assets that people don't understand very well," he said. "And so they don't have the trust on which a financial system depends, and which inhibit, because of all of that uncertainty and distrust, their capacity to lend.
"While this is encouraging information, it doesn't mean that that problem is being removed," he added. "It's a problem that's going to take time. And it's a problem that's going to take strong policy."
Summers slammed insurance giant American International Group's plans to award senior executives hundreds of millions of dollars in bonuses and retention pay -- but said the government, despite committing $170 billion in bailout money to AIG, was limited in its power to stop the bonuses.
"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous," he said. "What that company did, the way it was not regulated, the way no one was watching, what's proved necessary, it is outrageous."
Treasury Secretary Timothy Geithner phoned AIG CEO Edward Liddy on Wednesday and told him that it was unacceptable for the company to award $165 million in bonuses after the government's funding. The lifeline given to AIG to stay afloat was far more government bailout money than has been awarded to any other firm.
In a letter to Geithner Saturday, Liddy agreed to restructure some of the payments, but wrote that "quite frankly, AIG's hands are tied." AIG's chairman and CEO argued the firm would risk a lawsuit if it denied bonuses to its top executives.
Summers argued that the Obama administration has made efforts to limit the bonuses awarded by AIG.