The US Economy May Surprise: Altman
After the economic headwinds die down in the next few years, the U.S. economy could show some surprising growth, Roger Altman, founder and CEO of Evercore Partners, told CNBC’s “Closing Bell.”
Looking out a few years, Altman said, “We’re going to have a bigger snap-back in housing than people think. The U.S. has undergone a breathtaking revolution in oil and gas production and the growth impact of that is underrated.”
Altman also pointed to a bounce-back in lending and strong industrial competitiveness as reasons to be optimistic about the economy longer term.
The former Clinton administration official also said there may be a fix for the country’s debt and deficit issues next year as well. He suggested letting the tax cuts expire but doing something about spending.
There is still reason to be concerned about the economy in the short term. “If it was up to me, I’d like to see a further round of fiscal stimulus,” Altman said. “That’s not in the cards. Fiscal policy has done all it’s going to do for the near term.”
That leaves monetary policy as the only flexible tool policymakers have left. “I think Ben Bernanke took the right step and I don’t think there are any dangers in that step,” Altman said of the Federal Reserve’sdecision to implement another round of quantitative easing. (Read More: Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates.)
Altman also weighed in on the "too big to fail" debate over the banks. “Banks are not too big,” he said. "Scale is an asset." (Read More:Wall Street Legend Sandy Weill: Break Up the Big Banks.)
Altman also noted that the financial system has been living with the issue of big banks for a while and it's not a huge problem. "Every other industrialized country has the same reality," he added.
"Is it sensible to have a hedge fund in an institution that’s guaranteed federally both through the deposit insurance system and the Fed’s discount window? That’s a legitimate question but we don’t need a reinstatement of Glass-Steagall to deal with that,” he said referring to the Depression Era law that separated investment and commercial banks but was repealed in the 1990s.