From Greenspan on ABC News This Week -
ABC News' George Stephanopoulos Reports: Former Federal Reserve Chair Alan Greenspan said this morning that this is "by far" the worst economic crisis he has ever seen. "There's no question that this is in the process of outstripping anything I've seen, and it still is not resolved and it still has a way to go," he said in an exclusive "This Week with George Stephanopoulos" interview.
Greenspan also noted, "let's recognize that this is a once-in-a-half-century, probably once-in-a-century type of event."
Meanwhile in the Washington Post, McCain Economic advisor, Donald Luskind offers a different view
Things today just aren't that bad. Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. And unemployment figures are up a bit, too. None of this, however, is cause for depression -- or exaggerated Depression comparisons.
How does our economic future look?
Greenspan, per ABC News -
Looking ahead, Greenspan changed a previous prediction on whether the economy is headed towards a recession. When asked if the chances of escaping a recession were greater than 50 percent, Greenspan responded "no, I think it is less than 50 percent."
McCain advisor in Washington Post -
There have been 11 recessions since the Great Depression. And we're nowhere close to being in the 12th one now. This isn't just a matter of opinion. Words -- even words as seemingly subjective as "recession" -- have meaning.
In a new working paper, economist Edward Leamer of UCLA's Anderson School of Management shows that changes in the unemployment rate, payroll jobs and industrial production almost precisely explain every recession as officially determined by the National Bureau of Economic Research. At present, only the unemployment rate exceeds the recession threshold. The other two factors are far from it. According to Leamer's paper, we'll only fall into recession "if things get much worse."
This would suggest that anyone who says we're in a recession, or heading into one -- especially the worst one since the Great Depression -- is making up his own private definition of "recession." And probably for his own political purposes.
That's right, the McCain advisor alleges that talk of economic downturn is mainly fueled by the Obama campaign for political purposes.
A recent Zogby poll shows that 66 percent of likely voters believe that "the entire world is either now locked in a global economic recession or soon will be." Actually, that's a major clue to what started this thought-contagion about everything being the worst it has been "since the Great Depression": Politics.
Patient zero in this epidemic is the Democratic candidate for president. As it would be for any challenger, it's in his interest to portray the incumbent party's economic performance in the grimmest possible terms.
Oh, and on Phil Gramm's comments about us being in a mental recession, Luskind agrees -
McCain campaign adviser and former U.S. senator Phil Gramm was right in July when he said that our current state "is a mental recession." Maybe he was out of line when he added that the United States has become "a nation of whiners." But when it comes to the economy, we have surely become a nation of exaggerators.
When will the nation wake up? When will middle class voters realize that the McCain campaign is out of touch and does not have their best interests at heart?
Links
ABC News
Washington Post
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