Alan Greenspan spoke to CNBC this morning about the state of the U.S. economy, how unemployment numbers could improve, and how calculating the stimulus multiple is very difficult.
- 0:15 We kept rates low in 2003 because we saw plunges in the price index, and I still think it was the right move. The impact of the fall of the Soviet Union and the rise of China, coupled with the globalization of finance, set up a scenario that added to the housing bubble.
- 4:30 We will begin to see unemployment improvement when output per hour slows down.
- 5:45 It’s very hard to know what stimulus does. Econometrics can determine the impact multiple, but that is a model, absent of the larger realities. These computer models’ ability to forecast are awful.
- 7:35 Long term interest rates are a function of the deficit.
- 8:50 We are in a Democratic society, main street felt harmed by the crash, and they were right, in some cases, to focus on regulation.
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