Studio 12 Topic: The Economy
Denver- March 25, 2009 – As the American economy continues to become more fragile, the prospect of a plentiful future seems meek.
Studio 12 host Steffan Tubbs along with University of Colorado Professor of Finance Sanjai Bhagat, Patricia Kummer of Kummer Financial Services, Vince Crew of Reach Development Services and Colorado Bankers Association (CBA) CEO and President Dan Childears discussed not only the recent developments from the AIG bonuses, but solutions and outlook for dealing in this ‘bear’ economy.
The Studio 12 program is available for free online video-on-demand viewing at www.KBDI.org.
Bhagat believes that the United States could be looking at an economy in recovery had Bear & Stearns Financial Services been allowed to go under. “Let them fail, they were not large enough to hurt the overall economy,” asserts Bhagat. “That would have cleansed the system and perhaps as early as December we would have been looking at a recovering economy.”
Bhagat believes that the government over-acted and exacerbated the problem. “The stimulus didn’t anything that the economy would not have done itself,” said Bhagat.
Crew also saw flaws with such a large economic stimulus. “We will never know if there is a remedy for such a huge financial giant going down,” said Crew. “The position of the government seems reasonable…however, I don’t see an end in sight.” Crew sees the $200 million in bonus money as small, in comparison to the $170 billion that has been targeted to give AIG relief.
Patricia Kummer acknowledges that a government intervention creates confusion, as tax payers want to know, who, how much and why. However, “When there is a recession, the government typically steps in,” she says. She sees light in Presidents Obama’s plan to create growth in the economy as the administration attempts to rebuild state economies.
In spite of public perception, CBA’s Childears says that there is credit available in Colorado. “Loan values for 2007-08 were up 11.7%,” said Childears. That equivocates in to $70 billion dollars for the state. We’re actually lending more than ever.”