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Kevin Hassett, American Enterprise Institute senior fellow, on Ben Bernanke’s press conference today and the anxiety surrounding the U.S. economy to...
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-- fed chair Ben Bernanke keeping his options open for more stimulus although he didn't learn that congress -- pay attention that fiscal cliff.
Our next guest says that the biggest issue holding us back right now joining us now Kevin -- HIE senior fellow an economic posse director.
You know what's really interesting to me is that you say you as anxious now did you word during the Billy fiasco why is that.
Yeah that's right that the fact is that Europe is very very close to the edge.
We've got you know year over year activity in Spain down more than 10% we've got Greece.
Having an election on the seventeenth of June -- you know who knows where it's gonna go.
And and I think that that Europe is not going to end well the only question is when.
And when Europe starts to go down you know I don't know how far it's gonna go and an absolutely I think it's it's you know -- telling sign.
That Bernanke and and some other fed officials have been out the last couple -- days trying to you know calms down.
But the fact is that did that plus the weak employment report there are very concerning signs right now.
And Kevin you say so concerning that the odds -- of another recession off 5050 S seems pretty high.
Yeah I think 5050 is about what we're looking at right now you know one of the key factors -- the jobs report.
Was that the hours numbers were actually tilting downward.
And I think that hours to output in the second quarter which is limited you know near term ways that we can -- what GDP is gonna look like.
You know could well be if we get another bad month could be a negative indicator even for the second quarter and something like that is something you usually see about half the time before -- -- Yet you right you know let's talk about the fiscal -- a little bit you.
Are you confident that congress is just gonna extend everything at this point because.
They certainly don't have the time now to go through all the hidden tax Extenders bush tax cuts in actually take things apart one by one.
Right and it looks like nobody's gonna do anything before the election you know I actually asked the senator off the record a couple of weeks ago at an event.
You know if he thinks it's all going to be in the lame duck and he said yes and and think about it this way.
Less every -- how crazy it was well last summer we just had the debt limit this hammer hammer gonna have the debt limit plus every other feature of the tax -- there's no way they do anything other than just kick it down the road six months.
You also -- -- the Fed is out of bullets a matter what they do at this stage is gonna have a whole lot of impact do you say.
They should do they the politician should do what they did in Wisconsin is that right.
Yeah that's right at what we have to do is basically get people cause for optimism.
We need to put government policy back on a sustainable -- -- can actually believe that you understand what government policies going to be a couple three years from now if you do that.
All this -- that we see on the sidelines that you guys talk about just about every day.
We'll start to me you know go to work again -- America's businesses will be building plants and and and creating jobs but right now.
I mean you'd almost have to be a fool to do that to make a really big capital commitment given that we're looking at a government that Scott policy that's just so out of touch with reality.
That doesn't say much so quickly Kevin for the rest of the year mean you're basically saying there's -- company shouldn't have any confidence in this economy.
I'm saying that for the rest of the year I'm very anxious that -- we're gonna get into recession again because.
You know we've got this European -- we've got a jobs report that's got -- very close to the edge.
And we haven't even really begun to see -- impact of tax me getting -- and million of the fiscal Clinton and so.
As -- get closer to the third or fourth quarter how excited are you about growth you know and imagine that we're starting from a second quarter there could well be.
-- below 1%.
Nothing like -- doom and gloom in the afternoon -- You very much -- -- sorry yeah.
