Former Fed Chair Ben Bernanke weighs in on the economic response to COVID-19

good morning afternoon Glenn Hutchings here welcome everybody to this I hope proved to be a fascinating an insightful session with Ben Bernanke and David Wessel when the financial crisis hit in 2008 and Ben Bernanke was Fed chair there was no playbook so he had to create one from scratch a few of us expected that his successors would need to refer to it so soon but fortunately for all of us he left a copy for Jay Powell to consult I would recommend for people on this call if they're interested there's a very good book called fire fighting which is the summary of the crisis and one called first responders which gets in deeply to the individual programs I'd recommend everyone have a look at it over the next over that couple weeks then then among other things is a distinguished economic historian pickney well-suited to put this kind of this horrible event of respir Ian Singh now in context was they'll give us a sense today of what will determine how deep this recession will be perhaps how long it will last how effective the fiscal and monetary policy response has been and perhaps what's likely to come and whether the code that 19 recession will leave long lasting scars on the US and the global economy so I'll turn this over right now to Ben for his remarks after which David Wessel will pose some questions and then after that I think could be some instructions on how the audience members can ask their own questions so Ben over to you and thank you for doing this you know thank you glad thank you everyone for joining us this afternoon seems like a long time ago now but in January in February we had a very strong economy with the three and a half percent unemployment rate we're hopeful at least that the strength of that economy will provide a little bit of momentum provides a bit of financial reserve to help us get to this very tough period of course what has happened is that the world's been hit by the cove at 19 virus the virus itself is doing great damage but from an economic perspective the fact that on essential businesses are being shut down globally this an enormous effect on economic activity people are not shopping people are not working people are not going to school and we're gonna see those the effects of that and the data very soon you need to keep the data in perspective if GDP in the second quarter is say ten percent lower than in the first quarter remember we report on an annual basis so multiplied by four very possible we'll see GDP numbers for the second quarter of the order of magnitude of minus 30 percent or greater likewise unemployment is hard to measure in the short term people who are furloughed from a company are they unemployed will they be coming back in the near term we'll see some dramatic numbers but I think we won't know for a while how serious and how deep this phenomenon is going to be clearly people have made comparisons to the Great Depression it's not a very good comparison the depression was twelve years long it came from financial crisis it came from manmade human-made errors and decisions this is more like a natural disaster and the response is more like emergency relief than it is a typical stimulus or anti recessionary response now having said that the critical factor in terms of how bad this is going to be how much imprint it will leave on the US economy is its duration how long will it last the longer it lasts the more existing businesses will fail financially will close their doors the longer it lasts the more people will lose their jobs and not lose their association with their former employers the longer it lasts the more disruption there will be and the harder will be to come back so the duration is going to be critical the most important determinant of the duration is the public health response we are currently in shutdown because we are trying to put bend the curve that means we want to get the rate of new cases low enough that people can feel confident that the system can handle the cases we want to add palliatives and medicines and treatments we want to test and trace we ultimately want to be able to feel that people can go back to work safely and that is going to depend more than anything else on the public health response and and I think that's still a great deal of question about how that's going to go one scenario is that we partially open up the economy over the summer and that perhaps in the fall there's more infection we shut down parts of the economy again so overall it could be a very bad year for the US economy but again the the public health response and our ability to make sure that the hospitals have the equipment they need and that the scientific establishment is putting all its resources into addressing this disease will be the most important determinant of how long and how deep this downturn is now having said all that there are other components to the response in which I'm more expert let me talk about briefly the fiscal response and then spend most of my time on how the for the reserve is responding to this crisis now fiscally again what we're not really talking here we're not really talking here about a stimulus package because people can't really go out and shop what we're talking about here is emergency relief what we need to do primarily in the fiscal package is make sure that people can survive this period without with very low income that businesses that are losing revenue can can pay to pay their bills pay the rent pay the utilities so that when the all-clear is sounded or at least a partially clear or sounded they can open up again and we can restore economic activity that is a big big part besides the part of the fiscal program that addresses health and needs the biggest part of the cares Act the 2.2 trillion dollar fiscal program is trying just to provide life support for an economy that is going to be shut down for a while until we have a better grip on the on the disease so the the money is going into direct payments to individuals to help them get through this period I think the main issues they our logistical are we getting the money to people fast enough is it enough they'll probably be more coming later but it's the right idea to try to help people get to this period the other part is to help businesses survive this period and that involves both some grants a large amounts of money for the airline industry for example but also credit to help firms pay their bills and remain solvent so they can open up again when the health situation is is better so I think overall the fiscal policy response which again you should think of as an emergency relief package or disaster relief has been pretty good there are some there are some logistical issues in terms of say getting the money out but it has the right shape I do suspect there will be more coming later as we help the economy get back to full employment and I would also add that this will probably be almost entirely debt financed which in this circumstances I think is probably appropriate that's is why we have the capacity to borrow to deal with these kinds of crises now let me talk with the remaining a few minutes about the Federal Reserve which has been extraordinarily active and I want to commend Jay Paul and his colleagues for being very proactive in trying to address concerns and the economy the Fed has done basically three types of things and each of which has an important role in supporting our financial system and our economy the first is supporting market functioning and providing liquidity this is what central banks were created for this is what the Fed was set up for in 1913 as you may know those listening may know that the Fed has been dealing with some liquidity issues going back into last year when the repo markets were somewhat destabilized so the Fed was putting the quiddity in the system as early as last fall but since then with the pressures on financial markets coming from the uncertainty associated with this crisis there's been a lot of destabilization Fed is responded in a big way it has been for example buying large amounts of Treasuries and mortgage-backed securities to help restore a good functioning in those critical markets it continues to put cash into the system to try to make the repo markets and the money markets work better it's opened up its discount window so that banks can borrow at 1/4 or 1% the interest as they need liquidity to make loans very importantly the Fed has also been providing liquidity in the international system so when back in 2008 in the financial crisis one of the problems around the world was that so many financial transactions take place in dollars and of course the only source of dollars is the Federal Reserve so in order to stabilize money markets around the world the Fed conducted what's called swap operations with 14 other central banks meaning that we found ways to provide them with dollars that they could then use in their economies to help stabilize their financial systems and that in turn affected u.s. financial markets the the Fed in this instance has also set up swap agreements with 14 the same 14 central banks so once again the Fed will be acting as a lender of last resort in dollars not just to US banks and financial institutions but essentially to the rest of the world it's also set up a facility whereby other countries besides 2-14 can pledge the Treasuries they hold get dollars get cash and again they provide liquidity as needed within their own economies so the Fed is acting very aggressively to make sure that there's enough cash and the fluidity in the system that's the first line secondly the Fed has been aggressive on on monetary policy they lowered interest rates as you know over the summer last year they cut rates three times as insurance and that seemed to be what the doctor ordered so to speak and the risk of recession risk at the time fell and it looked like the Fed had achieved a soft landing now we have much different situation the Fed has cut rates down to the minimal zero to 25 basis points that we saw in the years after the financial crisis it has issued forward guidance saying basically that we're gonna keep rates at zero until the economy is clearly back on track and inflation is moving back to two percent I suspect that will be quite a while and the asset purchases that's been doing at least five hundred million dollars of Treasuries and two hundred billion dollars of MBS mortgage-backed securities have already been undertaken that will transmogrify into quantitative easing again helping you keep rates low and monitoring conditions easing after the crisis the health crisis has begun to ameliorate so again this is really kind of astute two-stage process at the moment easier financial conditions are helping the system making it easier for example for corporations to borrow so that they can continue to survive but it's not really time yet to stimulate spending and get people to go out and buy cars and houses that will have to wait till the health situation is better at that point monetary policy will begin to perform its normal function now finally and most innovatively the Fed has been intervening in substantially in credit markets so credit markets have been very disrupted by the crisis by the fact that people are so uncertain about how long it will last what the cash flow implications will be and so as the crisis began many many credit markets were disrupted and the Fed as Glenn said has borrowed from the feds playbook from 2008 and then added quite a few innovations of its own borrowing from the 2008 of playbook it's done really three things first it's created a commercial paper facility which provides commercial paper short-term lending to corporations to help them finance their inventories and their materials their working capital that was something we did in 2008 that's on the Shelf that is up that's that's is already running second there's a money market liquidity fund that they we also had in 2008 they brought up to allow money markets to sell their securities and reduce pressure on the money markets we've seen some run phenomena on money market mutual funds and this has been helping there as well this was something we did in 2008 and then a third facility that we had that they are also planning to reintroduce but I have not yet the so-called towel the term asset backed securities lending facility is used to buy packages of credit consumer credit credit cards auto loans student loans and a variety of other types of credit to help make those markets more effective so these announcements together with the Treasury and mortgage-backed securities have already improved credit market functioning considerably now going beyond that the Fed is going to use its 13-3 emergency powers which we used in 2008 for the first time since the depression the Fed in general has very limited ability to buy assets and make loans but under emergency conditions so-called unusual and exigent conditions and with the permission of the Treasury secretary the Fed can essentially lend to anybody that's the 13-3 facility the 13-3 power and bit and based on that they're adding a whole number of lending facilities that will try again to ensure that businesses can borrow cheaply and effectively in order to maintain their survival through this period so what what's coming out there's two corporate facilities as one that's going to lend directly to corporations essentially making loans or buying bonds of corporations again to help them to survive the period there's a secondary facility that will buy existing bonds trying to improve the functioning of the credit markets and the corporate bond markets and then thirdly and this is an important and difficult one departing quite substantially from past experience the Fed is also going to be introducing a so-called Main Street business lending program now Main Street is a little bit of a misnomer because it's really for middle sized firms five hundred to ten thousand employees and what the Fed will be doing and we don't know all the details yet but presumably they'll be asking banks to make the loans to these mid-sized firms and the Fed will be providing cheap liquidity and perhaps providing protection against risk so the banks will be incentivized to make loans on good terms - these mid-sized firms now the smallest institutions the smallest businesses are eligible for loans from the SBA the Small Business Administration that began this week there again logistics is so important there have been some snafus in terms of getting the money out I hope that will get straightened out but that is supposed to provide the the SBA's program is supposed to provide cash to smallest businesses on favorable terms and in fact those loans are at least partially forgivable if the companies the small companies maintain their payroll now the Fed is helping there as well it announced I think just today or yesterday that it will buy SBA loans from banks or provide a secondary market for those loans making them more liquid and making banks more willing to make those loans so I guess I think the thing to emphasize here is that the Fed what the Fed can do is reinforce the the private credit markets where the private credit markets are dysfunctional because of the leveraging because of uncertainty that the Fed can come in and replace those markets to some extent or strengthen those markets and try to bring private lenders back into those markets the Fed does not give away money it the 13-3 requirements do do require that the Fed take collateral and that it intend to be repaid but in order to give the fence some protection a big chunk of the money in the fiscal program four hundred sixty five billion dollars essentially provides equity for the feds lending programs so that if they do lose money it'll be covered by by this by these Treasury funds so again there has been progress already we have seen the credit markets improve I think the critical issue will be how quickly the the help public health situation improves and that will in turn will depend on the logistics of distributing equipment and gear beds ventilators as well as the scientific effort that we are well that we really need to get control of this finally let me just point out I'd be talking about the United States this is a particularly difficult situation because it is a global situation almost every country in the world is suffering from this pandemic and almost all have chosen to significantly reduce economic activity so this will be a global recession the the situation is being worsened by a strong dollar by falling commodity prices by capital flow outflows from those countries so we may well see emerging market crises and and global recession as well as in the United States so is we have a hard roll ahead but I am pretty pleased overall with the fiscal and monetary responses we've seen we're gonna need more but at least those authorities have done what they can to help our economy stay functional until the public health situation gets better so David I'll stop there and be happy to answer any questions great thank you very much for that Ben and people listening in we have a number of questions already but feel free to add to the list by emailing events at Brookings dot edu or on twitter at hashtag kovat nineteen economy as you mentioned Ben the Fed has aggressively increased its balance sheet it's now approaching six trillion dollars so it will be twice the size it was when you left the Fed in 2014 is there a limit to how much money the Fed can create or reserves it can create to purchase US Treasuries and lend through all these emergency facilities is there is there some limit to how much the Treasury can borrow to finance this rescue it's not a real technically speaking there's not really a limit to how big the Fed's balance sheet can get at six trillion this would be it would be about thirty percent or less of u.s. GDP in Japan I don't know the exact number but on the order of 80 or 90 percent of gep is the size of the Bank of Japan's balance sheet so it could be it could be bigger much of the of the increase is temporary for example a lot of the take the commercial paper facility for example those are short-term loans and presumably as things normalized those loans will be paid back and the Fed's balance sheet will accordingly shrink but you know I think the the Fed does have capacity to increase its balance sheet and it appears willing to do so significantly and I think that's appropriate I don't think there's any real danger from that I don't think for example that inflation is going to be a risk if anything disinflation Logan inflation will be more of a concern in the next year then than too high inflation as far as borrowing is concerned yes the the federal government is borrowing a lot again as I mentioned this is when that borrowing capacity is so valuable when you have a national emergency and which of course this is paying for this with taxes would would be counterproductive just because it would depress buying power at a time when the economy needs these buying power I I think it's it's the the question of sustainability of the US federal debt is a tough one I think there are long-run issues clearly as the population ages as costs of medical care go up you know we see projections of the federal debt that are very disturbing over the next decade or two and we need to think hard about how we're going to get control of that trajectory but I think that in the near term dealing with a crisis of this magnitude that I think this is an appropriate approach and I would just note finally that interest rates being almost zero means that the interest burden associated with this borrowing is actually going to be quite low even though the number of dollars borrowed is high I want to back up to that inflation point because some people look at what's going on huge increase in the federal deficit low interest rates the fit creating a lot of reserves and they think surely this will create inflation maybe more than we want you don't seem to think that's the case I'll come well if you look at there our supply and demand elements of this crisis you know on the supply side you're seeing for example some things some types of goods are in short supply you're seeing some supply chains being disrupted so there are some supply side effects that you know will raise prices for certain goods and services overall though you know think about what's happening to the demand for major industries think about what's happening to the demand for airline seats or restaurant meals the because people are staying home and because it'll be a while before they are back to a more normal activity and because when they do come back to more normal activity they will have exhausted some of their financial reserves Zuma Blee I think spending is gonna take a hit so the net effect will be probably slightly disinflationary that's so what Jay Powell said in his press conference and I think he's right one way to one way to see that is just look at what's happening commodity prices oil prices for example which have collapsed so I you know I think overall that the monetary and fiscal stimulus will not will not sufficiently compensate to get us back quickly to full employment and the risk will be that in the short term that inflation will actually be a bit below the feds 2% target the Fed would like to get back to 2% or even a slightly above so I think at this point inflation is not a high risk it doesn't sound like you're anticipating a sharp v-shaped recovery it again it depends on dot the reason I'm not is because of the apparent trajectory of the of the virus and race of infection and the like it they tell us of course I'm not a doctor by any means but they tell us that a vaccine is 18 months away there are things we can do to open up the economy significantly perhaps but I don't see the economy returning to a more normal state until there's much greater confidence both among the average person and among average people and at the level of governors and mayors that opening up the economy won't restart the crisis so it seems likely that the if we if we could shut off the epidemic of course the economy would bounce back quickly but since we'll probably have to shut restart activity fairly gradually and there may be subsequent periods of slower activity again III don't think it's going to be a rapid response on the other hand I do want to draw the distinction between this and say a 12 year Great Depression if all goes well in a year or two we should be in a substantially better position I hope that the time back to full employment will be significantly less even than the Great Recession proved to be well that raises an interesting question the recovery from the Great Recession was sluggish and painfully slow are there lessons there that we should draw about either fiscal or monetary policy responses well I think on the margin I think both fiscal and monetary policy could have been more aggressive at certain stages in that recovery but it was a very different kind of recession it was it was started it was created primarily by the combination of a housing boom and bust and a financial panic and those things and the first instance as asset prices fell house prices fell made people feel a lot poorer and then the credit crisis meant that there was tremendous disruption in credit markets as well and so the way to think about it is that a recession is not just everyone stopping for a moment what they're doing and then going back to it rather a recession involves a whole lot of disruption people losing jobs being separated from their employers companies closing and depending on the house how long and deep and severe that disruption is the longer it takes to get back to a more normal and more normal situation but I recall you saying when you were at the Fed that you thought fiscal policy had tightened too soon that the period of the sequester hurt the recovery and I guess I was wondering whether you think that's a risk again this time well as I said a moment ago I think fiscal policy was not sufficiently aggressive and I think it times monetary policy could be more aggressive the the the initial 2009 fiscal program in retrospect and and some people said at the time was perhaps not adequately sized given the size of the problem and then there was a fairly quick response not just in the United States but globally towards a more more deficit reduction and tighter fiscal policy starting as early as 2010 and in the United States a very significant tightening in 2013 so yes the fiscal policy was too tight at various stages to fully aid the recovery back to full employment in this case you know I think the politics is a little different you know the 2009 a fiscal package was passed you know it was basically on party line vote this this one we just had was a more bipartisan supported by the by the president in both parties so I'm hopeful that you know with a more bipartisan approach to what is again a it's some level really a natural disaster I mean it this is a very big but it's in some ways similar to the Hurricanes or the floods or the other things that we've dealt with in recent years and about partisan response to support those people affected might be lead us to a more robust fiscal response as the economy recovers I see a number of people have asked about share buybacks which have become controversial and suggest that one of the consequences of a long period of low interest rates was share buybacks that somehow are unproductive I wondered if you have a view on that and also on the calls for the big banks to stop paying dividends and along if they've also has already suspended their share buybacks well share buybacks and dividends are not inherently bad things but they are basically is the bank or the company taking its excess cash saying look we haven't got any good use of this cash we're going to give it to our shareholders they can either use it for their own consumption or they can invest it somewhere else you want to have capital be mobile to go from from companies which have extra cash but no good use of that to other uses in the economy where where the cash can be better used so I I don't want to I don't want to argue against buybacks and dividends in general now the good news in the current situation is that is that the banking system unlike 2008 is coming in pretty strong that's going to be helpful for recovery on the other hand you know you want the banking system just stay strong and so there's I think a very tough question as to whether the regulators ought to cut back on on dividend payments or tell them to stop making dividend payments I we did we didn't do that in 2008 I think in retrospect you know that might have been a mistake because obviously in the end many banks were short of capital and putting out dividends reduces the amount of capital that the argument so I think there's a there's a case for asking banks generally to be very cautious about dividend payouts and share buybacks the the argument in the other direction is that you might give the impression that as policymakers when you tell the world we're telling the banks that can't pay dividends you might tell the world effectively tell the world that you think the banks are in trouble which you know which you may not believe and I don't think it's the case now so there's a bit of a signaling problem but so I think it's a complicated question I think the banks are pretty strong I think they have much more capital today than in 2008 but I do think some caution on dividend payments if it can be done in a way that doesn't hurt confidence in the banking system would be worth discussing one of the things that's quite different between the 2009 and today is the Congress sent back then appropriated a lot of money went to the tarp the Troubled Asset Relief Program was run by the Treasury the Fed of course was involved but it wasn't primarily a Fed program this time the Congress seems to have a lot of faith in the Fed has given the Fed four hundred and fifty four billion dollars which Jay Powell says he can leverage ten to one to lend so I'm curious what you think about this is this an including this time they're talking about buying securities at the municipal bonds as well as corporate lending against corporate debt and so forth I'm wondering whether you're comfortable with this use of the fan Fahd use of the Fed to lend almost everybody to make basically be deciding who gets credit and who doesn't and whether you think this is an inappropriate role for the central bank I think it's an appropriate role for the Fed given the circumstances I think it's Glenn Hutchins this morning had an op-ed talking about the importance of governance and making sure that that there are clear rules and clear oversight of the lending process but the Fed under Jay Paul and under previous chairs I hope has established a good record of nonpartisan and objective analysis so the Fed might Fed is I think a vehicle for providing government-supported credit that will be based on objective criteria and it's less subject to partisan debate then maybe another type of approach might might have so I don't think this should be a regular feature obviously we want the private sector to be the source of credit under almost all circumstances but in this case where credit markets were clearly disrupted the Fed I think has an appropriate role to try to restore stability the Fed has a broad responsibility to maintain financial stability and I think it's doing a good job of that and one sign of this is that we that is that we don't expect the feds lending to crowd out all other lending in in in markets like the commercial paper market and the corporate bond market we're already seeing normal private lending returning so the Fed is acting more like a backstop than it is the only lender or the primary lender and I think that lender of last resort backstop role is an appropriate one under these types of circumstances have we learned anything about places in the financial system that were more fragile or more vulnerable to shocks than we had realized or maybe that we hadn't done enough to shore up after the Great Recession well I think one area that people were worried about in advance and my colleague at Brookings Janet Yellen has talked about this a lot is the leveraged lending high-yield some of the some of the areas in the corporate credit markets that are stressed and and the Fed anticipated that if a shock came from some other direction that drove the economy into a slowdown that some of these weaker credits might exacerbate the problem and I think we're seeing some evidence of that have been some surprising problems even in the Treasury market at which the Fed is addressed by by buying Treasuries but broadly speaking again this is such raishin is very different from 2008 it feels like 2008 because we're seeing the big moves in the stock market and seeing lots of financial stress but in this case the shock is coming from outside the financial system it's coming from of course the pandemic and the effects on economic activity the financial system is strong and will be a bulwark against this becoming a much worse crisis if the Fed and the regulators do their jobs appropriately do you think it's appropriate for the government to take warrants or other equity interests and companies that it lends to at a time like this I would be you know so there's there's there's lending and then there's also some grants going on some where the government where the fiscal policy has included you know payments to industries which are where lending is not going to be sufficient in that latter case where there grants then there may be various ways in which that grant could be partially paid back through to warrants for example I think you know I think it's a balancing act and I'm not really closely enough involved in these particular programs to give you a good judgment you want obviously the taxpayer to be protected you want you want to have a reasonable return and remember again the feds of lending is is lending not grants it's not gifts so you want a reasonable return you want to say you want a return that's gonna not what the taxpayer to get their their money back on the other hand you don't want to impose such so many conditions and complex requirements first that it will make people unwilling to participate and second that it will make the paperwork burden so high again that it will you know make the logistical problems even even worse so I think there's a balancing act there I think that's appropriate to impose some requirements obviously including obviously certification of eligibility in need but I you know I think the main thing that you want to do is keep those companies alive so that they can function again when the health crisis is over and to try to ensure that as much as possible the taxpayers get their money back you've made this point several times and for good reason that holding keeping businesses intact so that they can more easily restart when the virus receipts is going to be critical to how we come out of this thing but I wondered if you could step back for a moment and this is speculation I understand to think about ways in which the economy may be different coming out of this either a consumer business behavior approach to government just to think about from the vantage point of history what do you think we'll be watching to see if it changes well economists have a term called hysteresis which basically means that temporary physics terms wasn't stolen from physics and the idea basically is that what you perceive to be temporary changes have permanent effects and there may be some hysteresis in this crisis in other words some of the things that happen in the course even if this is only a year or two in the course of this recession may have permanent effects in the economy so one example would be small business so one concern that economists have had about the US economy is that it's become more concentrated that larger businesses have had more market share if small businesses are knocked out by this you know by by this crisis because we don't adequately keep them alive then that could affect you know concentration in in in many industries going forward the form of work here we are having this conference on remotely people people at Brookings and all around the country or teleworking and learning how to work remotely will this change our shopping will change our work habits you know will this affect you know the way that we interact with people by online rather than you know in person industry composition will be affected no doubt I can't see as many people going on cruises for example there may be changes in the way that other travel industries operate to reassure people about safety and health so there are a lot of different dimensions but you know I guess it's the historical examples like the 1917 flu pandemic 1917-18 the Asia Asian who 50s and I think permanent impact I think this point a complete reshaping of us will be some changes will probably work on some dimensions and so there will be some changes going in going forward before this crisis quite a bit about a savings glad where there was more savings and not enough investment to soak it up which is of course why global interest rates have been so low as we look ahead to use which way do you think that balance will go I can see I can think of it more than one way we may have very risk-averse consumers people may be willing to save more I can imagine a lot of people not being willing to invest on the other hand government borrowing will be certainly a lot greater than it was before how do you see that savings investment balance or what we be watching to see well as you pointed out there's forces on both sides but if you look at the experience saved a great depression people who survived depression for many you know for many years were saved more or more cautious so I think that you know some of those same factors will be will be there you know if people think that in particular they think that pandemics will happen every 10 years they'll have more precautionary savings because they want to be prepared for those kinds of disruptions so I expect to see more and more savings and more caution which probably on net lower interest rates you're right about higher fiscal deficits but as Larry Summers and Anna Stansbury argued I think in a recent Brookings paper you know without the fiscal deficits interest rates would be lower still but they've not been sufficient to raise interest rates up to you know historically more normal levels finally let me close with this so I think a lot of people are just scared it's a very frightening moment you're not allowed to go outside in many places you've watched if you have retirement savings diminish the uncertainty about the future the next few months and even year of the economy is very unsettling so what what can you tell people to reassure them if you can about how we get through a period like well it's going to be a very difficult period there's a lot of uncertainty inherent in dealing with this illness we don't understand it fully a lot of people's financial resources are going to be tested both because of movements in the market and because they're trying to survive this period with low or reduced income so I I don't want it anyway you know diminish what's happening it's a very very tough and scary period one that has very few precedents in history all that said and I think history also suggests that we will find solutions for this illness whether they're logistical whether there's you know scientific advances whether they arrive whether they come from changes in how we work so I think that the US economy will recover and will in within a few years will show only modest marks of this experience so I think it we're patient do what we know we should be doing that will come out okay on the other end well we'll learn some lessons about being better prepared for future crises and future shocks of this type so I think you know with some patience and an optimism that we will come out of this okay but I I certainly understand and appreciate person their personal level the uncertainty that we're all facing over the next few months well I'll be right about that prediction thank you very much for your time and to people who are online if you have questions that we didn't get to I apologize if you send them to events at Brookings study to you and their questions we can answer and there are many we can't I will try and find a way to answer them so again thank you very much Ben thanks for watching be sure to LIKE and 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Channel: Brookings Institution

Views: 11,620

Rating: 4.7142859 out of 5

Keywords: Brookings Institution, Ben Bernanke, Federal Reserve, Glenn Hutchins, David Wessel, coronavirus pandemic, COVID-19, recession, US economy, stimulus package

Id: cj058HjciQw

Length: 45min 29sec (2729 seconds)

Published: Tue Apr 07 2020

Reddit Comments

[u/Richard_Fey]

Good content.