Alan Blinder – Charlie Rose 03-20-13

Salient to Investors:

Alan Blinder at Princeton said:

Bernanke has done a very good job and will stay if he wants it. Has an A+ on keeping inflation low and D- on keeping unemployment low. His Lehman Bros decision was wrong and was a turning point after which everything fell apart.

Fed is fighting fiscal restraint or austerity headwind and does not have the tools to get to 7% unemployment because it is down to incremental policies and has nothing left in its arsenal to increase growth much.

Economy plagued with chronic weakness. Since early stages of recovery, we have had very few quarters with 3% let alone 4% growth seen in previous recoveries to be easy to get. Expect 2+% growth rather than 3+% in 2013.

Housing starting to bubble, scratch that, come back. Business investment is doing nicely but is hiring equipment and not workers. For example, housing starts are up 27 % but construction employment is up only 2.5%.

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