Greenspan: ‘We’ve already seen the bottom’
EmailTons of news today from my exclusive interview with Alan Greenspan. The former Fed chairman told me he's "pretty sure we've already seen the bottom."
Greenspan listed a number of reasons for his positive outlook, citing upward production trends in several industries and the recovery of the financial system.
"There's been a very significant improvement in the financial system and it's been the financial system where the problems have been," he said.
When I asked him about the possibility of a collapse, Greenspan responded, “Collapse now, I think, is off the table.”
When he last appeared on “This Week” in September 2008, the economy was in the midst of the financial crisis which Greenspan then called a "once-in-a-century type event."
This morning, he told me that the U.S. economy had gotten past the crisis.
"We were teetering for awhile,” he said, “but I do think that the TARP program, for example, was very helpful in shoring up the capitals, that stock of banks and the like. And not an insignificant event is the $3.5 trillion increase in the stock market value of American corporations.
Now, he says business inventories are so depleted that he anticipates a sharp turnaround in growth.
"It strikes me that we may very well have 2.5 percent in the current quarter," he said.
That would be significant because it would be near the level necessary to ease huge job losses.
“The unemployment rate is going to continue to rise," Greenspan told me, "but more slowly than it’s been.”
There's one caveat to this, however. Housing prices, he said, must remain stable.
"If you get another dip and a renewed decline in prices, we're going to run into an acceleration of a number of homes that are less than the debt,” he said. “If that happens — and, clearly, looking at the structure of where debt and values, it would, if, for example, home prices fell by 10 percent or more — that would create a major acceleration in foreclosures."
– Inflation: Greenspan worried that current Fed Chair Bernanke's estimate of having a couple years before reigning in inflation may be too optimistic. “I hope they have a couple years,” he said. “I don’t think they do.”
– Health Care: He asserted that health care reforms could reduce the deficit, but “it is not adequate to be strictly revenue neutral because there is a lot more that needs to be done.”
– Taxes: Greenspan endorsed the proposal for a value-added tax put forth by former Clinton Deputy Treasury Secretary Roger Altman. “I don't like a value-added tax but I agree with Roger. I think that there is a fairly significant probability that the least worst solution to the problem will end up to be a value-added tax, quantities without significantly impacting on the economy.”
– Cash for Clunkers: With the House voting to increase funding for the program, Greenspan expressed support for program. “I have qualms about the concept, but there is no doubt that that very extraordinary response is a very important indicator that the state of confidence in the economy is beginning to pick up.”
- George Stephanopoulos
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Greenspan thinks George Bush stimulus saved the ecomney? hmmmmmmm I guess the left is getting the torches out to burn down his house..or maybe his wife andrea mitchell from the koskiddy network NBC will cut him off.
Michelle Malkins book Culture of Corruption.. the Obama administration of tax cheats, thugs and cronies is excellent.. I see you couldn’t hold it up georgie .. are you a little weak in the arm LMAO
Posted by: Obamas brownnosing media network | August 2, 2009, 12:07 pm 12:07 pm
Greenspan mislead the world for years about bubble after bubble. Now we are to respect his opinion ? Hardly.
Second, anybody doing any serious reading would know there is a real threat of a second collapse 12 to 18 months from now, as the paper pyramid being built today is a house of cards waiting to fall. Recovery with over 10% unemployment and Walmart wages.. who’s kidding who ?
Posted by: mike mentzer | August 2, 2009, 12:23 pm 12:23 pm
And why would anyone believe what you say?
Posted by: LongT | August 2, 2009, 12:49 pm 12:49 pm
The gubernatorial races are coming up and George Stephanopoulos certainly doesn’t want his party losing any of the governorships so has has to say SOMETHING that will help his party.
THe problem is, even if the economy IS improving, since Obama raises taxes on the small businesses he raises unemployment which is already at 9%. The way small business pays the tax is to either lay people off or raise prices which ultimately creates unemployment elsewhere. On the economy the Democrats are their own worst enemy.
Posted by: marco | August 2, 2009, 1:16 pm 1:16 pm
Actually, I stopped believing anything Greenspan said quite some time ago.
Posted by: jan | August 2, 2009, 1:45 pm 1:45 pm
Greenspan is responsible for the asset bubbles we have right now. Bernanke and Obama are doing everything they can to keep the bubbles inflated. My advice is to hire Madoff. If you are going to run government financial matters like ponzi schemes, you might as well hire the best. Of course my real advice is to allow Ron Paul and Peter Schiff to be president and treasury secretary, respectively.
Posted by: Huh | August 2, 2009, 2:29 pm 2:29 pm
The interview with Alan Greenspan was very mild for someone who had so much responsibility for the economic tragedy theworld is enduring
Posted by: Steve | August 2, 2009, 2:30 pm 2:30 pm
Greenspan should not be asked his opinion on anything important for news or other important business at all. He should go live a quiet life and stop doing tv interviews pretending he knows what is going on. Why did ABC news even bother with this guy after all his bad predictions and analysis
Posted by: jon | August 2, 2009, 3:17 pm 3:17 pm
Malkin? Really, George?
I’m trying to keep watching, but the discourse is getting a little lowbrow for my taste.
Please relegate her to the Beck/Limbaugh/Coulter brigade on Fox.
Posted by: dennis | August 2, 2009, 3:29 pm 3:29 pm
You invited Michelle Malkin to the Roundtable?! How much lower are you willing to go, George? Haven’t you think it would be a waste of your audience’s time? I am now wondering who’s next — Sarah Palin?
Posted by: teddymaniac | August 2, 2009, 3:43 pm 3:43 pm
how would greenie know what a recovery looks like..remember he didn’t see it coming..besides..i just got laid off..my job is going to India..go India!..
Posted by: killfluffy | August 2, 2009, 5:40 pm 5:40 pm
Its all bs I don’t believe anything on the Obama media.
Posted by: daniel | August 2, 2009, 5:47 pm 5:47 pm
And once again, the Republicans are disappointed the US has not failed today.
Posted by: Claire Voyan | August 2, 2009, 6:18 pm 6:18 pm
These celebs just can’t give up the limelight….once they have been there they can’t wait to get back…shut up Alan and enjoy your retirement…remember this all happened under your FED leadership.
Posted by: al casebere | August 2, 2009, 8:24 pm 8:24 pm
Yes, here we see more neo-con rhetoric calling for the failure of the US, how very un-American of you neo-cons. While you’re denouncing Greenspan, try with your little brains to remember who made him the Chairman of the Federal Reserve and what administrations he served, Reagan, Clinton and Bush. Notice, two republicans, both idiots that drove the deficit through the roof.
Posted by: JR | August 2, 2009, 8:32 pm 8:32 pm
Notice, two republicans, both idiots that drove the deficit through the roof.
JR…how very interesting…Bush pushed the deficit in the billions…your boy…Oblahblah has run it into the trillions….can you understand the difference…???duh???
Posted by: badboy | August 2, 2009, 8:40 pm 8:40 pm
And once again, the Republicans are disappointed the US has not failed today.
What rock are you living under??? You actually believe Oblahbnlah…hahahah
Couple months ago the “sky was fallin g, chicken little said” and got his stimulus package passed…now things are all rosie again…what a bunch of crap…Obama’s administration of thieves, thugs, tax evaders, and liars…Bush and Cheney are looking better every day..thanks to Oblahblah…
Posted by: badboy | August 2, 2009, 8:43 pm 8:43 pm
Poor Job George,
First, I’ve never heard of Michelle Malkin. Second, as an independant, I think she was the most intelectual and articulate guest in quite some time. Third, Michelle Malkin is the only name that you didn’t show on the screen (check the tape, you did mention her first name).
The best chance this country has going forward is to audit the Federal Reserve… Period.
Peace, Jake
Posted by: Jake | August 2, 2009, 9:04 pm 9:04 pm
I wont listen to Greenspan.He helped take us down this road..
Posted by: Christian Conservative | August 2, 2009, 9:20 pm 9:20 pm
Greenspan is the last person anyone should be quoting on the economy. He is personally responsible for implementing the false concepts that led us to the brink of disaster so his friends could ultimately bilk the America public our of several generations worth of assets.
Why would ABC bother quoting this charlatan?
Posted by: Ken Hamlett | August 2, 2009, 9:32 pm 9:32 pm
Republicans always like to see the bottom. They have seen that, now they can’t see the bottom anymore.
Posted by: jimjus99 | August 2, 2009, 9:35 pm 9:35 pm
I wouldn’t believe anything Greenspan says. He didn’t see this recession coming. If he didn’t see this coming he with all of his brains and information, he is incapable of being believed about anything.
Posted by: Bob | August 2, 2009, 10:45 pm 10:45 pm
George, I can understand having Matt Dowd, or another thinking Republican on the Roundtable. I absolutely do not understand soiling your Roundtable with the likes of Michelle Malkin. She is a propagandist who will lie, cheat, or say anything to support her fellow right-wingers. Case in point: her idiotic remarks regarding people staying on unemployment because they are too lazy to work. Other guests nailed her on it. She is out to make a buck peddling right-wing trash talking points, as is Ann Coulter, Glen Beck, Rush Limbaugh, Sean Hannity, and the rest of those clowns. You don’t need Michelle Malkin on your program unless you are simply trying to bring a few right-wing rating points. However, there’s a trade-off. I almost turned you off this morning. You don’t want me to do that. I’ve been a regular viewer since Brinkley first put “This Week” on the air. I even fibbed to Tim Russert in person once about MTP because there was a time in the early 90′s in Houston when the two programs were programmed against each other. I told him I never missed MTP.
Posted by: yodacohen | August 2, 2009, 11:03 pm 11:03 pm
Gee, I’m going to listen to the man that left interest rates entirely too low, for too long, thus fueling the housing thing that helped push us into this mess.
Posted by: Fedup | August 2, 2009, 11:41 pm 11:41 pm
A balance of political perspectives at the Roundtable is important, but only if all the voices there are actually credible. I see a bright line between commentators who are too stuck in polarized agitprop to agree to anything the other side says, and those whose views are independent and evidence-based. And I only watch or read the credible commentators, because the rest are not worth my time. The right was not represented this week by anyone worth watching. “The worst are full of passionate intensity; the best lack all conviction.” Please keep looking for conservatives with the mojo to do more than just react to Democrats. If ideas don’t matter here, then where?
Posted by: credibility first, agitprop never | August 3, 2009, 2:18 am 2:18 am
Why are you interviewing Greenspan? Shouldn’t the authorities be indicting him for creating this present mess? He lost all credibility a long time ago.
Posted by: ao | August 3, 2009, 6:15 am 6:15 am
And why would we believe Greenspan when he helped boost this mess?
Posted by: bobc | August 3, 2009, 8:20 am 8:20 am
Shame on you, George, and on ABC News, for treating Greenspan as some sort of respected oracle. Not a single tough question to the single person most responsible for the meltdown now known as the Greenspan Recession. You lose your own credibility when you act as cheerleader, participating in his rehabilitation, instead of questioning his competetance. No questions on that topic were part of the deal on this “get,” right?
Posted by: Arby Writer | August 3, 2009, 8:50 am 8:50 am
Let’s face it, Mr. Greenspan’s ‘hands off, the market will police itself’ approach caused many of the problems we face. He was all for deregulation and the COngress and leaders – Dems and Repubs – listened as if he were the financial Pope. Why should we listen to him now?
Posted by: kay | August 3, 2009, 10:01 am 10:01 am
Do those rose colored glasses you are wearing come in one size fits all? If so maybe you should send a pair to everyone in America, no wait, most Americans are already wearing them if they believe what most of the news casters are spitting out. The economy is no where near healing and the health care is the beginning of the end of our freedom. STOP don’t follow the President over the cliff. He has a parachute. Do You?
Posted by: Too Much | August 3, 2009, 11:07 am 11:07 am
Both Bush and Obama were on the same page regarding the various stimulus packages…the government followed a consensus strategy…it really didn’t matter who was “in charge”….
Posted by: That Guy | August 3, 2009, 12:24 pm 12:24 pm
George Soros is betting that america will fail, he’s betting money on it. Just like he did on england and he made millions. And he is a big supporter of Pres. Obama.
Posted by: Lizzie | August 3, 2009, 2:25 pm 2:25 pm
Watch out George, Rahm might not call you anymore in the morning, to tell you what to say that day.
Posted by: Lizzie | August 3, 2009, 2:35 pm 2:35 pm
On Greenspan’s WE’VE ALREADY SEEN THE BOTTOM: Sounds like the ‘light at the end of the tunnel in VietNam’ parlance when there was no light, no tunnel and we LOST! All the excesses, greed and corruption will have to be addressed before we can seriously comprehend improvement in the economy, and this will not happen anytime soon unless the political types shielding the ones who brought all the misfortune upon us, are voted out of office to be replaced by elected officials who can afford the price of integrity. Greenspan didn’t understand it before, he doesn’t now.
Posted by: clever bob | August 3, 2009, 2:44 pm 2:44 pm
I have watched and listened closely to what Michelle Malkin has done and said over the past few years. I believe she is a mean-spirited extremist and a liar. She belongs on shows that feature people like Limbaugh, Hannity, Beck, Ingraham, Coulter, etc.
In my view, when you put Michelle Malkin on the same platform as the legitimate political journalists and commentators that have earned the right to be featured on your show, you did three things: (i) you legitimized a nasty, hate-filled demagogue who’s carreer has been dedicated to crowding out rational debate; (ii) you delegitimized the fair minded, informed, rational, though partisan, commentators whom the show has always attracted (if I were Cokie Roberts I’d be too embarrassed to ever take part on that forum again); and, finally (iii) you belittled and denigrated an institution that has been a meaningful part of many of your viewers lives.
I’m 38. I’ve been watching “This Week” for 25 years. I’m offended that you would deface such an important forum with a fraud like Michelle Malkin.
I can’t say that I’ll never watch again because that would be a lie. But “This Week” will never be the same for me.
David Brinkley would be ashamed.
Posted by: Michael | August 3, 2009, 6:09 pm 6:09 pm
Who would have thought federal debts spiralling from $3.1 Trillion in 2001 to $8Trillion by the time Bush era ends, in 2008 through a series of tomfooleries?
How could Obama hold to his commitments in this unexpected situation,add to this economic melt-down resulting in millions of job losses?
So as his team-mates say,it’s better to keep the option open as per the demand of time.
Posted by: M Saleem Chaudhry | August 3, 2009, 9:27 pm 9:27 pm
George, I look forward to seening your show. But this weekend I was so disappointed that you had Michelle Mailkin on. I have heard her on Fox News and I have very little respect for her. She makes up most of what she talks about, she is not objective nor intelligent to be in a discussion with your other participants. If you are going to have an extreme right wing person as Michelle (for I do not think she is even a republican), then you will be better off having Oberman and Rachel Maddows on your show at least they are well educated and versed on all matters. Perhaps you could search for some of the same personalities from the republican side, they used to have them!!!
mmm
Posted by: m. mcgrane | August 4, 2009, 2:17 am 2:17 am
For those complaining about Malkin…she’s the right-wing version of Arianna. You’re fine with propagandists – as long as they are left-wing, like the Huffer. Add a right-winger, though, and you crybabies start whining ["she's a propagandist who will lie and cheat..."]. Hypocrites.
Add Al Hunt (who dug him up?) and Cynthia Tucker to the mix, and this was one show I’m glad I missed.
Posted by: Robert | August 4, 2009, 6:47 am 6:47 am
Hate the guy, hate the message? Not me. Wonder what you naysayers will be saying this time NEXT year? Even when things get better (and yes, they already ARE), I’m sure it will still be negative, negative, negative. This country is going to succeed in SPITE of you. HAPPY BIRTHDAY MR. PRESIDENT!
Posted by: sign seeker 17 | August 4, 2009, 7:12 pm 7:12 pm
There are a number of articles or notes titled the poverty of economics. Economics has been a declining profession for several decades (although graduate schools continue to fill up their programs with not needed foreign students. Among the reasons for the decline are the bad forecasts and policy recommendations of economists. In many if not most cases haphazardly mix recommendation in areas where they do not have much expertise to areas where they do. The great liberal economist Milton Friedman (he said he was a liberal) called for economist to practice positive economics to separate analysis from opinion. Many prominent economist (Greenspan and Krugman) fail in this regard. Greenspan probably more than Barney Frank and Bill Clinton bears responsibility for the financial bubble that led to the major collapse. Central to the bubble formation were low real interest rates over and extended period of time. With the immense Federal spending program kicking in over the next 5 quarters the Fed should react quickly to avoid a large round of inflation and another bubble.
Posted by: merchantilist | August 9, 2009, 6:58 pm 6:58 pm