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Today the Fed chair cautioning the recent financial crisis as lord the rate at which that the economy came in will grow.
Partly because of -- loss of skills and productivity.
Is talking about a new normal.
These factors may have pushed up to some agree to so called natural rate of unemployment the rate of unemployment that can be sustained.
Under normal conditions.
And reduced labor force participation as well.
German now Wall Street legend Louis Foreman chairman -- institute former chair of the ratings gold commission and great to have you here.
To -- them all right.
Doesn't quite rise to the level of irrational exuberance -- I have the feeling we just we we just witnessed the Fed Chairman say something that's going to be.
Right up next to his name every time he speaks from here on what do you think.
Laying the ground work for putting the -- on congress.
If things go wrong just -- as he and -- in the form ignored the causes of the bubble.
And the recession and collapse.
Which occurred as a result of -- raising interest rates very abruptly -- -- you know I'm fine and when he six.
Well I have to say in our view and I disagree about how well -- doing a job that I know you think you should haven't given -- -- -- But this is a statement that is it leaves me scratching my the idea that there is a new normal -- rationalize as high unemployment.
And low growth.
You know it's working for the Fed -- of the same.
I guess but to actually believe it is is truly disturbed.
I think he -- he believes it because he he believes something about next year he believes the economy is gonna grow.
As slowly as this past year or even slower now what could be the cause of this Federal Reserve's monetary policy don't know.
What is likely to be the cause of it congress' unwillingness to.
Deal with the fiscal -- but as you propose.
No dealing with the fiscal cliff.
I'm next year but dealing with it in the future far future this is this is bizarre and by the way is does the president have a role in all of us.
-- president and -- Bernanke's mind.
The president has been well he certainly had something to say he had to do with.
No question but the quantitative easing -- QE3.
And the aggressiveness of the Federal Reserve put the money supply and attempt to keep the economy -- -- even keel helped Obama in the election.
So what -- -- -- fiscal cliff yes -- do we go over it and if so the cuts we don't go over the fiscal cliff but not for the good reasons which I.
I've heard you analyst passed them very little movement on tax rates next year.
Very little movement is now on spending generally a slight decrease daily movement are you saying that the bush tax cuts will be allowed to expire.
No what I'm saying is that the bush tax cuts but for a I'm a slight modification will persist in 2013.
And spending reductions which would have been been made by the -- sequester.
I will not be made in the amount suggested and will be only modest and it won't be a reduction in spending will be a modest reduction in the rate of increase in spending such that we'll have.
They -- one trillion dollar plus deficit next year.
More of the -- Blue armor source instructor -- issue.