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Boston Properties Chairman Mort Zuckerman on the economic downturn and Federal Reserve efforts to boost a recovery.
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Our next guest says the failure of the Obama administration to create jobs has -- to -- crash and confidence.
And not a recession.
A double dip recession.
Or even worse may be -- us joining us now Mort Zuckerman chairman of Boston properties were great to have you are great to have you with us here I'm I'm not.
I'm nearly sure what you mean by even worse that sounds -- dreadful indeed.
Well we are possibly in this situation and maybe comparable and my guess we're in the -- of a modern day -- depression.
And the only difference is you don't see bread lines because we're sending out ten million checked unemployment checks that.
Have for as much as 99 weeks but we have had the worst set of economic statistics.
And that they are still heading felt.
And we may have something that -- we're gonna look back upon it's a it's a depression not just the recession.
And yet -- as we look back over the course of the past year we've and have a remarkable run up and the market itself the stock market.
-- we've seen crude oil prices.
Return our we had seen gold prices appreciated sport now.
And and reaches historic levels -- how can this be in the midst of what you're describing them as possibly.
Well some of those numbers that you mentioned -- in fact reflect the lack of confidence that investors have in terms of where they put the money they put the money into gold because they don't wanna put in the stock.
When treasury ten year treasuries are down below 2% that is a very.
Serious signal.
At people are worried about where they're going to invest the money they don't want to put it into equities.
They're putting into what they think is the safest investment even -- -- less than 2% over ten year.
The numbers are mind boggling.
So large that there are frankly incomprehensible certainly to me.
But when we talk about a 400 billion dollar.
A Federal Reserve operation twist to move to the long side of the curve.
Into.
-- maintain and even -- those long term rates.
Were from a 400 billion dollars in the next ten months by the Fed.
We watched half a trillion dollars about parade from the market today what in the world are they doing well I mean I hear -- you have to separate the two I think they have this action on the part of the Fed is actually a legitimate.
At camp to try and lower interest rates over the longer term in the hopes amongst other things.
That this will help a lot of people particularly people who own residents -- to refinance their homes.
And then this and make them more that's sustainable in terms of their own income -- business fifth particularly by reinvesting in supporting mortgage back right secure that's right.
So that there is a legitimate Deborah I frankly think that the Federal Reserve has done a better job.
Frankly in the congress in terms of addressing.
The problems that we old phrase more yeah well my holiday prominence due to the flatness of the ground around the my guess because I think that congress -- program.
Would just with -- this stimulus program.
That that it -- really critical to do with the beginning of the downturn because that you have a chance to stop that downturn from feeding on itself.
And now we're in a very difficult time in terms to be able to have any effect on this.
On the economy.
Are holding in them.
Myself and -- On the issue of whether or not the Fed is take -- correct policy.
Of course the fact is 400 billion dollars that will trickle out over the course.
The next ten month vs half a trillion dollars.
-- lost in market cap and one day.
These seem to be the things of which one would expect that the Fed to -- some slight considerations some sense of the consequence of their policy decisions.
I don't think the stock market is going down because if they had if extending -- bare in through operation twist.
But that the period of a year is Paper that they're binding they would be trying to keep we would -- -- a -- contributory I'm sure that we just never one -- that reason why is because what the Fed fed if they sit there are significant downside risks in the economy.
After we've had the most significant.
Fiscal and monetary stimulus and our history and that that is really something that shock everybody -- this several other things but that.
We've with the there's a lot of confidence that the bad that's a serious insight into the economy and they're being quite candidly describe what -- situation.
I I suppose I have a difficult time reconciling the interest 25 million Americans who are out of out of work -- -- work.
Yeah I against a fed that.
Does not anticipate the consequences of both operation twist an exercise that hasn't been carried out in fifty years in this country.
Secondly.
Doesn't understand the significance in the lot and the likely logical impact of saying significant.
Weakness in this economy.
These this seems to be beyond.
You.
Any reasonable.
Judgment yeah well I think what they're trying to do amongst other things is to maintain their credibility moon and I think the words significant premiere there done that where 500 billion dollars worth of credibility.
Yes that's right well I don't think it's just that I think what they are worried about.
I think trying justify blocking it why they're doing what they're doing they had indicate what it is in the economy that sort of prompts it can -- it.
And that's why they use them with to get and I agree with you if what what really worries me is that reflects a much deeper concern about where this economies heading which frankly I happen to share.
I think the you look at consumer confidence.
Which has fallen off the edge of the tape with 20% below the levels of all the previous recessions that right had.
So we if you have very weak consumer spending in a country where 70% of the economy it's consumer spending and the housing market is falling off the -- of the table.
You know you really have problems -- -- that we have not been able to get a dynamic going within the economy.
That really intense despite all of the stimulus this sort of have a Begin to -- spontaneously.
Without government steroids and that is a huge problem that we're looking at.
Is very ready solution no I don't think there is a ready food but there are some things that would could be done I can tell you one of the things that I have that -- and believe.
Number one we ought to really revamp the tax code and eliminate all the special privilege that lower tax rates by broadening the base that would stimulate -- business and then.
The consumer -- I think that's the best thing you can do without adding to -- already gigantic budget deficit.
Resort and thank you very much for being here not there.
