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DODD: RECOVERY “NOT GOOD ENOUGH”

Statement at Federal Reserve Chairman’s Semiannual Monetary Policy Report to Congress

February 25, 2010

WASHINGTON – Today, Senate Banking Committee Chairman Chris Dodd (D-CT) outlined just how much work is left to be done to repair our economy at a hearing to consider Federal Reserve Chairman Ben Bernanke’s Semiannual Monetary Policy Report to Congress.
 
“Today, as you testify before us, it is worth taking a moment to recognize that our economy is showing signs of emerging from this recession.  During the last two quarters, GDP has shown positive growth, as has gross private domestic investment.  And financial markets have stabilized enough to allow the Fed to wind down nearly all of the liquidity facilities it established in response to this crisis.”
 
“But that doesn’t mean our economy is out of the woods.  And, more importantly, it doesn’t mean that the situation of working families has improved dramatically either.”
 
“The state of our economy as a whole may be improving, but, if we’re talking about the situation of ordinary American families, I can sum up this recovery in three words: not good enough.  I think most would agree.”
 
“This Congress has a role to play in putting people back to work, and we have a responsibility to put protections in place to make sure that a crisis like this never threatens our financial system again.  Our Committee has made important progress toward that end, and my hope is that we’ll have a financial reform bill ready in the coming days.”
 
Testimony and webcast will be available after the hearing at:
http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=97232778-ccc1-4048-8d84-ea6eb50b55c7
 
Below is the Chairman’s statement as prepared for delivery:
 
“Today, as you testify before us, it is worth taking a moment to recognize that our economy is showing signs of emerging from this recession.  During the last two quarters, GDP has shown positive growth, as has gross private domestic investment.  And financial markets have stabilized enough to allow the Fed to wind down nearly all of the liquidity facilities it established in response to this crisis.”
 
“But that doesn’t mean our economy is out of the woods.  And, more importantly, it doesn’t mean that the situation of working families has improved dramatically either.”
 
“Households and small businesses, dependent on banks for financing, continue to have trouble getting the loans they need.”
 
“Commercial real estate losses continue to mount, and combined with losses on home mortgages, they are making the credit crunch even worse.”
 
“Outside of securities guaranteed by the federal government, the residential and commercial markets for mortgage-backed securities are practically nonexistent.”
 
“Foreclosures continue to plague our communities at greater and greater rates, and the large inventory of foreclosed homes continues to suppress the housing market and discourage new construction.”
 
“And, worst of all, the job market continues to suffer from the losses incurred during the recession.”
 
“We’ve lost 8.4 million jobs since December 2007.  The unemployment rate stands at 9.7 percent.  Although many of us here would argue the number is vastly in excess of that in many areas of the country.  And it is widely expected that it will remain high for several years to come.  An astonishing 6.3 million American workers have been out of a job for half a year or more – that is a record in our nation.”
 
“The state of our economy as a whole may be improving, but, if we’re talking about the situation of ordinary American families, I can sum up this recovery in three words: not good enough.  I think most would agree.”
 
 
“The longer we go without resolving these problems, the worse off we’ll be.  Unemployed Americans will continue to lose their health insurance and their homes.  Their skills will begin to deteriorate, leaving us less competitive in the global economy.  Those who do have jobs will see their wages stagnate.  Our country will suffer.”
 
“This Congress has a role to play in putting people back to work, and we have a responsibility to put protections in place to make sure that a crisis like this never threatens our financial system again.  Our Committee has made important progress toward that end, and my hope is that we’ll have a financial reform bill ready in the coming days.”
 
“Mr. Chairman, you also have a role to play in all of this.  I have been impressed by your leadership in keeping the American economy from falling into the abyss.  And you deserve a great deal of credit.  Now it’s time for you to show the same leadership in helping American families avoid the same fate.”
 
“I look forward to working with you, and to hearing your ideas today on how monetary policy can help our constituents emerge from this recession.”
 
                                                            # # #
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