Economists Question Fed Projections

[UpInArms]

http://www.washingtonpost.com/wp-dyn/articles/A10518-2004Jul23.html

The Federal Reserve's bullish economic outlook for the year cheered investors initially when it was released Tuesday, but it appears to be too rosy, several economists said this week.

Central bank policymakers predict a big pickup in economic growth with tame inflation and slowly rising interest rates, according to their semiannual monetary report to Congress, which was delivered Tuesday by Fed Chairman Alan Greenspan.

"Chairman Greenspan donned his Goldilocks outfit," in presenting the report, Ethan Harris, chief U.S. economist for Lehman Brothers Global Economics wrote to clients yesterday. "We think he is being a bit overly optimistic."

<snip>

In particular, critics questioned the forecast by most members of the central bank's top policymaking group, the Federal Open Market Committee, that the economy will grow between 4.5 percent and 4.75 percent this year, on an inflation-adjusted basis.

That would require "a virtual explosion in growth" in the second half of the year, because the economy expanded much more slowly than that in the first six months, said Mickey D. Levy, chief economist at Bank of America Corp., echoing other analysts.

...more...

[UpInArms]

1. have to add one more little tiny paragraph

because of the subject matter :D

The policymakers generally missed the large decline in inflation that occurred from 1981 to 1986 and the recessions of the early 1980s, the early 1990s and 2001, the researchers found.

Anyone else notice which administrations were in office during those "missed" projections?

[mom cat]

9. Nice catch UpInArms. As to your question, beats me. Could it have

been the republicrooks? :evilgrin:

[SheilaT]

2. You can be sure that between now and November 2nd

we'll be fed an unending pack of lies about how good the economy is, how many jobs have been created, and so on and so forth until even the unemployed and homeless themselves believe it. And then, on November 3rd, surprise surprise! The economy will turn out to have been in a shambles and it WAS ALL CLINTON'S FAULT!

[Green Lantern]

3. Job creation

Who in their right mind believes what the gov't is putting out on job creation over the last few months? They have lied about everything else, why not this?

The 'improvement' in the economy only seems to apply to the corporate world.
As Greenspan fights inflation, what he is really doing is keeping down wages and earnings for us wee folk, while creating conditions for the improvement of earnings in the corporate world. I would suggest that, rather than the story they have fed us for a couple of years now, the real reason interest rates came down to 40 or 50 year lows is the consumer credit debt. They didn't want to risk the massive losses that would result from actual or de facto bankruptcies. They reduced interest rates to give consumers relief until such time as they thought it safe to resume higher rates. The coprporations 'sacrificed" for the greater gain.

[UpInArms]

6. Welcome to DU Green Lantern!

Glad to have you with us :hi:

[ixion]

8. yeah, I've been wondering how people can think there are jobs

being created, when thousands of layoffs are being announced daily.

I think the only growth industries right now are security and military... oh yeah, and Black Water is hiring mercenaries. :eyes:


Welcome to DU, Green Latern. :hi:

[54anickel]

4. UIA, check out this toon from back when he first cut the rates - The

dogs are falling!

http://www.cartoonews.com/daily_cartoon.htm

[UpInArms]

5. has Meanspin's nose been growing?

He looks a lot like Pinochio!

[cliss]

7. Alan Pondscum is an indentured servant

to the Bush Mad-ministration. He is their lackey, their American Poodle. We've all read how he's made "rosy" statements, or "cheerful" prognoses about the economy, when in fact it's knocking on death's door.

Or how about his statements that the "average consumer is doing fine", and "no, the credit card debt is not ridiculously high, nor is he paying too much percentage-wise on his mortage". He's doing great.

I wouldn't trust this guy as far as I can throw him. Goldilocks. Imagine that Old Crony in a blond wig.

[struggle4progress]

10. kick

:kick: