Hard Times to Continue for American Economy

Economists throughout the U.S. continue to weigh in on their predictions, rationalizations, and remedies for the current market crisis. As many forecasts indicate, hard times are still ahead for the American economy, The Christian Science Monitor reports.

Dr. Milton Ezrati, a senior economist at Lord Abbett & Co., said he believes the worst is over yet write-offs, which continue to weaken the economy, will spur subpar growth throughout 2009. Henry Kaufman, a top Wall Street economist, said the issues surrounding securitized assets are approximately 60% over, but the economy will remain recessionary levels for a couple years due to trepidation among banks in extending credit.

The CEO of investment firm The Palmer Group and former dean of University of Pennsylvania’s Wharton School, Russell Palmer, indicated that the issues affecting the economy stem from the greed of Wall Street. Palmer’s solution to this issue is better leadership and supervision; the SEC and Department of the Treasury have already both announced reforms throughout their regulations this year. Harald Malmgren, a Washington consulting economist, stated that a lack of trust between banks and brokerage firms led to the break down on Wall Street. He thinks that standardization of debt and greater investor knowledge can help boost investment throughout the economy.

Kaufman further suggested alterations in the financial world by purposing the creation of a “Federal Financial Oversight Authority” that would supervise the 15 largest financial firms in the industry that possess $13 trillion in assets. This authority would be supported by the Fed and would make these firms report to Congress regularly.