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Former White House Council of Economic Advisers Chairman Austan Goolsbee on the impact on the economy of further action by the Federal Reserve.
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Joining us now is Austan Goolsbee former chairman of the white house council of economic advisors and mr.
-- -- is now professor.
At the university of Chicago's Booth school of business professor good to have you with.
-- seeing envelope -- Austin what are you what is your reaction to.
Extraordinarily I think aggressive move by -- chairman Ben Bernanke.
I sort of have two reactions I mean the first reaction.
-- is.
They shouldn't be that the Fed trying to figure out how to loosen monetary policy if I had told you.
510 years ago that the economy would have.
Unemployment above 8%.
Inflation well below the 2% target in the GDP growing.
2% a year or less every one would've said well obviously they should be loosening monetary policy.
The problem is.
The interest rates 300%.
So -- -- do that they're trying to come up with it.
This second reaction I have though is.
They used up most of their best bullets for Q we.
The first time they did it the second time they did it and kind of the third time they did so I can see why they're doing this and -- still think it will be.
As big a vote reaction in the marketplace as may be its biggest proponents hope.
Diminishing returns perhaps in terms of impact but nonetheless this market have made it pretty clear to me in the Federal Reserve as well as everyone else that they're quantitative easing have been built and other -- the investor outlook over the course.
Of the next many months.
If it's unimaginable that they would have done something because the impact in the markets don't you think would have been decidedly negative.
I think the impact would have been decidedly negative that's correct -- not totally convinced that that's.
In -- even in the top three or four considerations.
When the Fed makes its decisions but I think you're absolutely right the market had factored that -- Well for all of us retail folks who were one way or another are invested this -- of these markets.
We get more than just a little.
That way more than a little passing interest in the impact here but let me ask you this we're sitting here and now.
It's extraordinary debate for years buy into the economic crisis and a recovery that is it.
Let's be generous it's -- need.
Why is there not more discussion about the solutions direct.
Miracle specific solutions.
To create eighteen economic growth and driving.
Job creation we are hearing -- mindset platitudes and ambiguities.
And paper is comments from left and right.
-- why are we hearing something about business practices.
The policies of government that.
Asked specifically what are the policies that we are following that is creating this jobless recovery.
What what policies what I don't.
Over I don't know I think that's I think that's a great question.
And now I think.
You start to see some of it sometimes from the politicians but mainly we're in.
-- of combat and so I think that's deeply undermined our ability -- -- work together and try to solve.
Either the jobs crisis or the long run fiscal crisis in the country.
I think when we look at the solutions.
We ought to look beyond just our borders because the one.
Overwhelming fact about this modest.
Recovery.
Is that this a worldwide phenomenon it's not just having to do with the United States is not just having to do with.
Policy in the US you're seeing.
Borderline catastrophe in Europe is seeing dramatic slowdown throughout Asia including in China and India -- As well as in the more advanced countries like Japan.
And who this is this a tough spot for us to get out -- I mean with historically coming out of financial crises he does take a long time.
And we're seeing that play out or get here I hope we do get to the specific discussions you're -- -- about.
Well.
Let's put it on the record I tried very hard.
And also what you and I continue the conversation let's begin the conversation without question next time what are the solutions you bed and get.
-- because the pain is too extensive.
And the stakes are far too -- to continue.
The combat without meaning thanks very much Austan Goolsbee good to have you with great to see.
