Is Washington to Blame for Weak Economy?

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Oct. 1 (Bloomberg) -- New York University Professor of Economics Mark Gertler and Evercore President and CEO Ralph Schlosstein discuss Washington's culpability for a weka economy. They speak with Betty Liu on Bloomberg Television's "In The Loop." (Source: Bloomberg)

Let me talk objectively about the facts.

The main impediment of growth has been fiscal policy.

Remove from a financial crisis that we have dealt with i think reasonably effective.

Now we are having a political crisis.

We have had an austerity crisis for two years.

That has been a tremendous source of frustration.

This adds the pressure to what we were to do.

This is why they decide hang on, we will not pull back on the stimulus not yet.

What the fed has said very clearly, their intent is to exit quantitative three, but it will be dependent on the performance of the economy and what they are looking for is a sustainable, private sect were recovery so they can withdraw the extraordinary monetary spend -- monetary stimulus.

Every time we have one of these shows in washington on it derails the momentum of the private-sector economy.

I did the -- i think the fed did the wise thing in september in the anticipation of the political leaders.

How will this obligate the whole issue of nominating a new fed chairman.

I do not think it will affect the new nominee.

Imagine the frustration and the fed.

They would like to withdraw stimulus, pull back from you we.

Because of the dysfunction in congress and the insane fiscal policy, we cannot.

At the same time congress criticizes for doing quantitative easing.

Time and again people have said critics has said it is not doing anything for the economy.

Why not pull back on it to?

I think that is a mistake to say that quite honestly.

First of all, the effect on intermediate and longer-term interest rates has had a clearly stimulative effect on the economy, particularly on the housing sector and other credit sensitive sectors.

We have a fiscal policy that literally, we say a firm hand on the tiller.

No hand on the tiller.

The fed is literally the source of stability, confidence from washington or government.

I think all you have to do is look at market reaction when they talk about modifying the economy.

It is clearly supportive of the economy.

That is clearly right.

If we did not have quantitative easing, things would be far worse.

Why aren't fed officials speaking out then.

If you go back to look at the testimony, he made very clear the problems are self-inflict it.

We have the austerity budget that is slowing growth in the short run.

Fiscal problems have to do with medicare.

That is a problem if we do not do anything about, it will kick in in 10 years that we need to plan ahead.

There is no reason why we cannot have a short-run stimulus program.

Thank you for joining us.

We will be back in two minutes.

This text has been automatically generated. It may not be 100% accurate.


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