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Milton Ezrati, Lord Abbett senior economist and market strategist, weighs in on the economic recovery and potential for a ‘lost decade.’
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Slowing US economy leaving many I think we could be heading for double dip recession or even worse a lost decade or decades.
Now like the economic situation in Japan but my next guest thinks the US should be able to avoid the state joining me now is -- is right.
But at -- senior economist market strategist.
Thank you so much -- joining us back on the show mountains so with today's GDP report US one point 5% this is about the worst US economic recovery in its history.
Japan's been lackluster for some twenty years now to see any parallels.
While -- draw parallels but they're also a lot of differences so although we can learn a lot from Japan's experience I think it would be a mistake.
To carry that that similarity to fall.
Fair point I mean there are all kinds of differences namely the Japanese crisis was triggered by a rapid rise -- interest rates back in 1989 it's certainly not the case here.
But what -- the key difference is and what does the US need to pay attention to and learn.
From Japan because obviously they've been -- it a lot longer than we have so.
What are the pitfalls the US needs to avoiding what are the risks that remain for the US.
Well I think about what the Japanese failed to do and that what we're doing better but could do that is still them we are.
Is that -- when Japan had that crash the real estate crash in the market crash as you point out late eighties early ninety's.
They he will very slow to act.
They were very slow to clear bank balance sheets they were very slow to bring quantitative easing we've already done a lot of things better than they did.
But we could continue we should continue to clear up our balance sheets.
In our economy and get rid of policy uncertainty the Japanese have been living under a very low innovation economy.
A very controlled economy from the government.
We have to rid ourselves of that and that will will help us avoid the pitfalls Japan silent.
No -- suggested another round of quantitative easing should happen.
Actually.
We've done the quantitative easing we've probably done although we -- we -- a lot faster than the Japanese which is good.
But right now they -- the ball really is in the fiscal court as far as the United States is concerned.
Lot of the reserves to banks have all in excess of what they need pouring more into that is not going to stimulate this economy.
Yeah I mean that's the question is because here we are four years into it and we're just not getting any.
Any life at all we're just fading here in the US and continue to do so there's a lot of concern now about a double dip recession -- -- -- report today was a little better but strong likelihood that's going to be revised downward.
What's your take on a double that thirty -- on the record saying now I mean he's still feel that -- considering the data.
I do I think what what we've seen here this quarter was disappointed I would've liked to seen stronger numbers but we're not getting it it is of the peace with what we've been -- since recovery.
Began very slow numbers some court does look a little -- -- kind of a confluence of things makes it a little strong will be give -- back in the next quarter and we've been continuing that way and are likely to continue in this slow growth mode.
And you -- on how LLC as they need to get past the election -- get into the new year before we can had any potential.
For solid growth.
Option right now given the uncertainty in this marketplace which is what's holding us back -- certain -- from Europe policy.
I'd agree with that it's going to be really ought to show any real strong growth.
Until we start to remove those uncertainties and that means a concerted fiscal program is part of it.
And back to Japan what do they need to do.
What Japan needs to do a lot of things one is rescind the recent tax increase they've been talking about -- -- they're gonna cripple their own economy and they've done this before.
The Japanese and everyone in Japan academics government people businesspeople say the economy has to allow for more innovation.
Cease to be quite as top down as it's being they call -- the iron triangle the bureaucrats and politicians.
And big business control everything.
That's still the case in Japan they have failed even though everyone in Japan agrees with what they have to do.
They have failed to do that the United States has done this to some extent we have to move away from that kind of -- And taxes are going -- here in the US -- it's troubling number unfortunately we're out of time known as right thank you as always for joining us.
Thank you tighten --
