March 17, 2008
Clinton On The Economy: "We Are In The Soup"
WASHINGTON, DC -- Hillary Clinton said today that she is watching developments in U.S. financial markets closely after efforts by the Federal Reserve over the weekend to try to head off a crisis.
The Fed has lowered the discount rate to increase liquidity in the market and helped JP Morgan buy troubled firm Bear Stearns.
Clinton said she spoke this morning with Treasury Sec. Henry M. Paulson, Jr., and the president of the Federal Reserve Bank of New York about the steps taken yesterday to restore confidence in the market. She said that as an NY Sen, in particular, she is concerned about the impact these developments could have on workers and families, and on the city's economy as a whole.
"I'm particularly concerned about the many employees of Bear Stearns and their families and the ripple effect through the economy that this is going to cause," the senator told reporters during a brief press conference after her speech on Iraq.
She did not directly answer questions about what she would do to help shore up the falling dollar or whether the Fed had done enough.
"Clearly the consequences of inaction were deemed to be much more difficult for the economy than having the Fed step in," she said. "The extension of the $30 billion of backstopping JP Morgan Chase is a big commitment on the part of the Fed, but clearly they have the resources to make that commitment. I think that from what I have been told the worry was that there would have been a chain reaction that would have quickly required much more significant resources, so I'm not going to second-guess the Fed either on their movement to get the sale consumated and to back up the JP Morgan commitment or to cut the discount rate," she said.
Clinton repeated her call for urgent action in addressing the nation's mortgage crisis as a way of dealing with the credit crisis.
"When I first called for a lot of these step, I was ridiculed by the Bush administration and frankly my Democratic opponent," she said. "Now we are in the soup, and we better get ourselves out of it before the consequences are drastic. There are lots of people who are talking about using tools we haven't used since the Great Depression, legal tools that give the government the right to do certain things. You know, I haven't looked at the legal background, but some say that even the Fed's unprecedented intervention has roots in what was necessary then. I mean, I cannot stress to you we are in a very dangerous period in the economy. We need vigilance, and we need leadership, and we've gotta get it from, you know, this administration."
(NBC/NJ's ATHENA JONES)
Posted at 12:32 PM
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