Hopelesness!

It´s amazing the things we hear from people who should know better. The latest is from Martin Feldstein. In 1977 he was profiled in Fortune as one of the young risisng stars in the profession. Right on the button because just a few years later he was head of Reagan´s CEA. For many years he was president of the NBER and sat on the cycle dating committee. One would naturally assume he knew what he was talking about when interviewed on the current economic situation. But these days it seems such assumptions are misplaced. This is Feldstein:

Is the U.S. in a depression? In a word, “no,” Harvard University economics professor Martin Feldstein told the Journal’s Kelly Evans in this week’s “Big Interview.” “I’m not quite sure what a depression is,” he said. Still, he expressed concern that there is a “nontrivial chance” the U.S. economy will turn down again, calling the current recovery “about as bad an expansion as I’ve ever seen.”

Mr. Feldstein also serves on the business cycle dating committee of the National Bureau of Economic Research, an independent board tasked with declaring the official start and end dates of recessions. He said current Federal Reserve Chairman Ben Bernanke — who has taken heat from both sides of the political aisle lately — has done “a remarkably good job” during his tenure. But Mr. Feldstein added that the Fed “has gone too far recently in pushing for lower interest rates” and he would prefer to see government action instead directed at mortgage principal write-downs, not just refinancing.

What if we showed him the pictures below? Would he at least recognize the “depressive nature” of the economy? It´s certainly not as bad but what if we “discount” by the “greater knowledge” that economists are supposed to have 80 years on? Then maybe it´s even worse! Further, how can he say Bernanke, one of the most knowledgeable economists on all aspects of the “Great Depression”, has done a “remarkably good job”? Especially if one considers that the “Little Depression” followed on the heels of more than two decades of what Bernanke himself named the “Great Moderation”!

Oh! What does he mean by saying the current recovery is “about as bad…” What has he been paying attention to in all these years at the NBER?