Tags: mort | Zuckerman | Obama | Failed | Economic | Pain | Continue

Zuckerman: Obama Has Failed, Economic Pain to Continue

By    |   Thursday, 04 Nov 2010 09:46 AM

The Obama administration’s economic policies haven’t worked, and the situation won’t improve quickly, says Mortimer Zuckerman, chief executive officer of Boston Properties.

“There’s a real sense in the country that the Obama administration has failed,” he tells Bloomberg TV. “Whether they can turn this around I don’t know. I’m a little less optimistic than most. … The economy is really in trouble.”

And why is that? “We face a huge problem in housing,” Zuckerman says. Prices are still going down, and about 11 million mortgages underwater. (Homeowners are underwater when their house is worth less than the value of their mortgage.)

“That’s a huge effect on the American economy and consumers, because home equity is the largest asset on the balance sheet of the average American family. That will have real effect on consumers’ willingness to spend.”

The economy will have to go through a period of deleveraging, Zuckerman says. “I don’t know how you do that without a lot of pain,” he explains.

“The ratio of household debt to income is extraordinarily high. We have to get that down – we’re talking about trillions of dollars of deleveraging.”

Spending on Social Security, Medicare and Medicaid also must be cut, “so there is some sense there will be fiscal sanity in this country,” Zuckerman says.

The Federal Reserve’s new easing program won’t make much difference in this environment, says star economist Nouriel Roubini. “These factors (the economy’s weak elements) point to anemic growth and easing inflation in 2011,” he writes in Forbes.

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The Obama administration s economic policies haven t worked, and the situation won t improve quickly, says Mortimer Zuckerman, chief executive officer of Boston Properties. There s a real sense in the country that the Obama administration has failed, he tells Bloomberg...
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2010-46-04
Thursday, 04 Nov 2010 09:46 AM
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