The American Economy Today
Thomas F. Cooley is the Richard R. West Dean and the Paganelli-Bull Professor of Economics at New York University Stern School of Business, as well as a Professor of Economics in the NYU Faculty of Arts and Science. He was appointed Dean of NYU Stern in 2002.
The former President of the Society for Economic Dynamics and a Fellow of the Econometric Society, Dean Cooley has received numerous awards for his teaching and is recognized as a national leader in both macroeconomic theory and business education. He is a widely published scholar in the areas of macroeconomic theory, monetary theory and policy and the financial behavior of firms.
Before joining NYU Stern, Dean Cooley was a Professor of Economics at the University of Rochester, University of Pennsylvania, and UC Santa Barbara. Prior to his academic career, Dean Cooley was a systems engineer for IBM Corporation. Dean Cooley received his BS from Rensselaer Polytechnic Institute, and his MA and PhD from the University of Pennsylvania. He also holds a doctorem honoris causa from the Stockholm School of Economics.
Question: What is the state of the American economy?
Thomas Cooley: In late April of 2008, I would describe the state of the economy as being quite precarious. I believe that we are going to face another several months of very slow economic growth and, you know, I think that we have many problems yet to work out in terms of the function of credit markets.
Question: Are we headed for a recession or a depression?
Thomas Cooley: Well, the talk of recession is, some sense, it's academic, so recession is defined formally as two quarters of negative economic growth and it's also defined as a slowdown that's very wide spread. It affects all sectors of the economy. So, certainly economic growth is slow, whether it formally qualifies as a recession or not is somewhat academic. Most people are feeling it, certainly it's being felt in many, many sectors of the economy. So whether it will turn out to be a severe recession, we don't know yet. Some people think it will, I don't happen to be among those. And a depression is a sustained economic slowdown, so the Great Depression of the 1930s, some people talk about the Japanese Depression of the 1990s. That's a very, very long period of sustained, low, or even negative rates of growth in the economy. I don't think that's likely at all for the U.S.
Question: Why do you consider a depression unlikely?
Thomas Cooley: I'm still a strong believer in the forces that drive the U.S. economy, which are innovation and creativity. And I believe that we are still in the midst of a process of substantial innovation, technological innovation in society, and that innovation is going to continue to drive the U.S. economy, new ideas. So I'm a big believer in that.
Question: What do we need to fix?
Thomas Cooley: Well, one thing we have to do is restore faith in credit markets and restore faith in the credit process so that once again, their liquidity can flow through the economy and find its way to financing new businesses and implementing new ideas and innovations. The recent slowdown has had everything to do with housing market, the collapse of the housing market bubble. And we have to get that out of the way. House prices probably have a ways further to fall in a lot of locations. And the impacts of that take time to work their way through the economy. So the combination of the collapse of the housing bubble and the impact that had on credit markets, the impact that that, along with all the other things that sprang from that have to work their way through the economy.
Are we headed for a recession or depression? How do we fix it?
A guide to making difficult conversations possible—and peaceful—in an increasingly polarized nation.
- How can we reach out to people on the other side of the divide? Get to know the other person as a human being before you get to know them as a set of tribal political beliefs, says Sarah Ruger. Don't launch straight into the difficult topics—connect on a more basic level first.
- To bond, use icebreakers backed by neuroscience and psychology: Share a meal, watch some comedy, see awe-inspiring art, go on a tough hike together—sharing tribulation helps break down some of the mental barriers we have between us. Then, get down to talking, putting your humanity before your ideology.
- The Charles Koch Foundation is committed to understanding what drives intolerance and the best ways to cure it. The foundation supports interdisciplinary research to overcome intolerance, new models for peaceful interactions, and experiments that can heal fractured communities. For more information, visit charleskochfoundation.org/courageous-collaborations.
Progressive America would be half as big, but twice as populated as its conservative twin.
- America's two political tribes have consolidated into 'red' and 'blue' nations, with seemingly irreconcilable differences.
- Perhaps the best way to stop the infighting is to go for a divorce and give the two nations a country each
- Based on the UN's partition plan for Israel/Palestine, this proposal provides territorial contiguity and sea access to both 'red' and 'blue' America
A federal judge ruled that the Trump administration likely violated the reporter's Fifth Amendment rights when it stripped his press credentials earlier this month.
- Acosta will be allowed to return to the White House on Friday.
- The judge described the ruling as narrow, and didn't rule one way or the other on violations of the First Amendment.
- The case is still open, and the administration may choose to appeal the ruling.
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