Roger Altman's Memo from the Fed Summit
Senior Editor, CNBC.com
Roger Altman’s op-ed in the Financial Times argues that although our current financial slump may have a few more years to run, we’re likely headed for another boom.
Altman’s piece deserves attention not just because he is on most shortlists of Treasury Secretary candidates in a second Obama administration, but because it was very likely written while Altman — currently chairman of Evercore Partners — was in the company of some of the most important economists and central bankers in the United States. (Read more: Bernanke at Jackson Hole: No More Easing, For Now)
This past weekend, Altman was in Jackson Hole, Wyoming for the wedding of Alison Fisher, his goddaughter. Alison is the daughter of Dallas Fed president Richard Fisher. (I reported the details of this wedding the week before last.)
But this was not the only event in Jackson Hole this weekend. The Kansas City Fed’s economic symposium, which has developed into one of the most important central banking conferences of the year, was also held in Jackson over the weekend.
To emphasize, Altman was most likely writing his op-ed after spending time in the company of some of the brightest and most influential economic minds of our time. His piece really should be read as the final contribution to the symposium.
So what does Altman see as the source of the surge he predicts? He lists five signs of renewal:
Rising home prices. Home prices are rising in half of the major housing markets in the U.S.
Booming energy production. Gas and oil production in the U.S. has increased at “breathtaking” rates.
Financial sector health. The banking sector, nearly nationalized while on its deathbed just a few years ago, has recovered faster than anyone thought possible.
Competitiveness. A few years ago, we were becoming a post-industrial nation. Now we’re back in the game of making big, hard things.
Budget balancing. Here Altman gets a bit partisan, predicting that an Obama re-election could result in a budget deal that brings down our mounting debt levels.
So, is Altman reflecting what he heard from the central bankers? It’s not clear. The end of his piece actually make it sound like he’s doing something more interesting: attempting to balance out the pessimism that came out of the symposium.
“Many leading economists would challenge this surge theory. They foresee another decade of continued headwinds and mediocre growth.
That may be the mainstream forecast but an alternative, better scenario is coming into view,” Altman writes.
- by CNBC.com senior editor John Carney
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