What's the view forward now?
I suspect that the Fed is going to look at the third-quarter GDP number, Tom, and it will suggest the economy is just moving sideways, so they will probably act in November and December to expand the Fed's balance sheet by buying Treasuries and mortgage-backed securities.
What would you like Obama to do?
What I would want the Administration to do is simply say: Listen, we are going to leave the Bush tax cuts in place at least for another year and remove at least that uncertainty off the table.
There are politics involved, though.
I understand that. Yet the economy is only growing at, let's say, 1.5 to 2 percent. That is not a big margin of error to conduct what may be perceived as a significant policy change by hiking taxes. Also, to know that your tax on dividends and capital gains is going up, you may have more of a rush to realize capital gains by the end of the year, which I think will put downward price pressure on assets.
When are we going to get above 2, 2.5 percent growth again?
My suspicion is probably in the first quarter and certainly in the second quarter of next year. I think Chairman Bernanke fairly summarized it: We are going through a healing process. Household balance sheets are improving. Home prices, yes, they are down, but gradually they are going to turn around.