By Joshua Zumbrun March 13 (Bloomberg) — White House economic adviser Lawrence Summers said he finds satisfaction in the economy’s turnaround from its plunge a year ago. One has to take “considerable satisfaction in the progress that has been made,” Summers, director of President Barack Obama ’s National Economic Council, said in a speech yesterday at a conference at Stanford University, near Palo Alto, California. “It was not unreasonable 15 months ago to fear a Depression- like pattern. The economy was losing more than half a million jobs a month. GDP declined as rapidly as it has in 50 years in the first quarter.” Summers said the economy should soon witness “a resumption of job growth.” Obama administration officials are trying to strengthen an economy that’s lost 8.4 million jobs since December 2007. “Prospects for success look better than they did a year ago,” Summers said. Payrolls declined by 36,000 in February, a smaller drop than the 68,000 median loss forecast by economists surveyed by Bloomberg News before the March 5 report. The jobless rate held at 9.7 percent, higher than the average of 5.7 percent in the past two decades. Retail sales unexpectedly climbed 0.3 percent, the fourth gain in the past five months, Commerce Department figures showed yesterday in Washington. Another report showing consumer sentiment dropped in March for the second consecutive month represented a risk to the improvement in sales. Faster Recovery Treasury Secretary Timothy F. Geithner said yesterday the U.S. would recover from the recession faster and more vigorously than other advanced economies. Summers devoted the bulk of his remarks to defending the administration’s proposals for financial regulatory reform. Summers laid out his view of the six “imperatives” for financial reform. Summers said the six were that too-big-to-fail firms be comprehensively regulated; that a resolution authority is established; that capital and liquidity requirements are increased; that banks should repay the costs associated with the financial rescues of the last two years; that a clearinghouse be established for swaps and derivatives; and voiced his support for the so-called “Volcker Rule” which would place limits on banks’ trading activities. Summers did not mention the proposed consumer financial protection agency, which is the subject of debate in Congress, as one of his six imperatives. He also said that reform of government-sponsored mortgage finance companies Fannie Mae and Freddie Mac would have to wait. “Our expectation is that it will be some time before it would be prudent for them to leave conservatorship,” Summers said. “Clearly down the road any sort of return to the hybrid model that we had historically would be very highly problematic.” To contact the reporter on this story: Joshua Zumbrun in Washington at jzumbrun@bloomberg.net ;
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Summers Says He Finds `Considerable Satisfaction’ in Recovery’s Progress
