Despite the economy’s 5.6 percent growth surge in the fourth quarter, many experts have doubts that the rebound is sustainable.
New York Times columnist Floyd Norris cites several reasons for the pessimism.
“First, the last two recoveries, after the downturns of 1990-91 and 2001, were in fact very slow to pick up any momentum,” he wrote.
Second, very few experts saw the Great Recession coming, Norris notes.
“Remember (Federal Reserve Chairman) Ben Bernanke assuring us the subprime problem was ‘contained?’ In mid-2008, after the recession had been under way for six months, the Fed thought there would be no recession.”
“Having been embarrassed by missing impending disaster, there is an understandable hesitation to appear foolishly optimistic again,” Norris writes.
Even President Barack Obama has been careful not to claim that the recession is over yet. It wasn’t until recently that he expressed much optimism about the economy at all, Norris points out.
To be sure, not everyone is pessimistic.
Two members of the National Bureau of Economic Research committee that officially determines when recessions begin and end, Jeff Frankel and Robert Hall, say this one is already over.
But others aren’t so sure.
Harvard University economist Martin Feldstein told Bloomberg that the United States faces “a significant risk” of a double-dip recession.
“The consumer is going to have a very hard time. Unemployment remains an enormous problem,” he said.
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