credit to the fed and monetary policy and qe 1, 2 and 3 but also if you look at obama over his eight years we had average gdp of 1.5% last year we had 1.6 and when trump came into office his first budget hit 2.3 and he hit 2.3 so i think there s a very clear dichotomy of obama versus president trump real bull market coming on strong with president trump. david: kevin who gets credit? i actually think the fed gets credit they went into the market and artificially suppress ed interest rates so people went into riskier assets so if we look at what, how you grow an economy, there s two levers you pull, monetary policy and fiscal policy, and so you saw monetary policy during barack obama s administration and then you saw fiscal policy during president trump s and so the fed is really dictating the market as going forward because we saw him capitulate six weeks after they raised rates in december and that s why you ve seen the recovery in the market
welcome back. we re back with our panel. john hilsenrath, ed rollins. steven ratner, chairman of willett advisers, former counselor to the u.s. secretary of the treasury. steve, thanks for joining the conversation. thanks for having me. i want to ask you about the economy where we are. tim geithner just out with his book stress test. it s been seven years since the dark days or six years since the dark days. how would you characterize things? actually, i m in the middle of reading tim geithner s book, and it gives you nightmares. it just brings back all of the fear and how close we really came to the abyss. and i think tim is a real american hero for what he did. and we re a long way back. we re not all the way back. we re in a slow growth economy for a whole bunch of reasons. and i don t really see that improving a lot. but at least we re growing. you know, part of the real stimulus and the boost to this economy, john, as you know, has been the federal reserve. right. an
on. so it is the epploiper-based insurance is a real problem and will go on. it keeps employerses where they are and keeps them from hiring people. that s the first thing that needs to be solved. above and beyond that, get rid of, you know, lower capital gains, get more money working in the economy. it worked for ronald reagan. they had much higher taxes reagan actually had the right policies to create jobs growth and until we do that, it s just going to go on the way it is. by the way, qe-1, 2 and 3, one of the largest, slowest recoveries we ve had, because the central planners have really screwed this up and they don t know jack about how to get the economy moving. otherwise, we wouldn t have had qe-1, 2 and 3. we d be far better off if we left that money in the private sector. taxes were much higher under kennedy, as were capital games,
robots, right, in the investment world, but we are not, and this volatility is just mind-numbing. it used to be 50 points was a big move, and now we ve had 100 points one way or the other. what s driving this? nothing we ve seen should surprise us for one simple reason. the rules of the road have changed. bear in mind we ve got qe-3. until this crisis we never had qe-1. qe was unknown. so it s not surprising. everything uncertainty, unknown, new rules. even the fed admits it s experimental. tapering. these are all different concepts. so it is not surprising in this environment that when something like bernanke speaking or when you have gold moving that investors are just moving with an element of mentality and an element of uncertainty. new rules of the road, high
of volatility since chairman bernanke did mention tapering back in may, which is where we had our highs. which means i will stop giving you this free market. meaning we have seen the most volatility all year. sideways to lower, the last two days significantly lower. there is probably some work to do on the downside in the near term. this is something that s needed. a pullback is needed. we need to get back to more compelling evaluations in the index stocks generally speaking. so it s not as if this is completely destructive. it s a question of a longer period of trend. it s pruning. that s a great example. when you look at five years ago when this whole, they call it quantitative ease, basically, this free money he has been throwing into the economy to start it. every time he said maybe i m going to stop, stocks tankled. you see qe 1, that s the first bout of money, ben bernanke was going to stop t. second time