Listen: Elizabeth Warren, Federal Reserve, Senator discussed on Ballots and Dollars
"I'm Rick Newman and I'm Alexis Christopher's Today. We are talking about senator. Elizabeth Warren's warning that the economy is about to crash is she right and if so no what can we do to prevent it Rick Newman's already weighed in also joining us as Jessica Smith Washington DC correspondent joining us from our bureau all right so first off a little bit of what Senator Warren is saying. This is a quote she is. She's warning lights are flashing. Whether it's this year or next year the odds of another economic downturn are high and growing Congress and regulators should act immediately to tamp down these threats before it's too late wreck it just your initial reaction to the letter she recently wrote does sort of have that feel doesn't it so here's a headline. Here's the headline of what she wrote in medium which is where she puts all her policy ideas the coming economic crash in how to stop it. This sounds like one of those those crappy financial newsletters. You know like some two bit fly by night thing like get put all your money in gold. That's here look at this. I mean like big head big headline against the dark backdrop with some kind of scary that animal. I couldn't tell like a deranged ball is right about to crash so what's it rains yet sick or maybe it's maybe it's rabid so she is saying well you know before we really dig in here. Let's call it what it is she did she was among among a few other people by the way who call the two thousand eight finance. I'm not she so yes and no so she had been complaining for years I mean she you know she's a long. She's a basically a lifelong critic of Wall Street who was complaining about bank lending practices for years before the two thousand eight financial crash and you know she complained about stuff like that you serious <hes> interest rates on credit cards. <hes> thing you know ways banks <hes> would you know tack on fees. He's in sort of trick people into just taking on more and more debt <hes> whether it's on credit cards mortgages and stuff like that I mean she kind of built a an area of expertise around consumer credit and consumer lending so that's what she focused on on a career basis and those those are not really what caused the financial crash in two thousand eight. I mean there was a giant housing bubble which she did not predict the housing bubble <hes> she didn't really talk about the abusive of underwriting standards <hes> there was kind of a Ponzi scheme going on with people buying houses because they thought house properties would always I mean she didn't predict all of that she just she just was kind of like always doomsayer and then and then finally happened so she was like a broken clock that was right twice a day <hes> so so okay I mean she I give her credit for the work. She's done on those topics but I'm I don't buy that. She's just kind of a soothsayer on economic doom and with regard to the some of the stuff. She's talking about here. I think this is actually economic scaremongering. I mean yeah I bet foreign has some some solid ideas but not on this well she she runs down a list of things she thinks is wrong. Let us just remember because we do this. The backdrop to all this is the unemployment rate is at a fifty year low wages are moving higher fire and the Federal Reserve is on our side constantly telling us in plain English. They're ready to cut interest rates yeah so she's taught in stock market at a record the stock market's at record highs. Let us not forget. She's talking about student loan debt being hi. It's been high for a long time. Talking about auto loans some more people now are defaulting on auto loans that is not going to cause a crash at least not a crash of the magnitude we saw in two thousand eight when we saw people not paying their mortgages on time much bigger problem spot on and I mean we're not going to sort of go through every single point she makes but I'll just pull out one and try to illustrate it so she says <hes> consumer debt levels have never been higher that sounds so bad it sounds terrible but <hes> in reality when you have a growing population and growing economy and increasing employment it makes sense that consumer always go up people. I mean you know everything is always at the highest level. Ever in a normally functioning economy measured another way the way it actually matters <hes> so these are this is data from the Federal Reserve they measure total consumer debt as a percentage of a personal income.."