Richard Vague on the Economy: What Me Worry?


Today, The Two Mikes spoke with Richard Vague who was
a banker for 30 years and most recently retired from the post of
Secretary of Banking and Securities for the Commonwealth of
Pennsylvania.
Mr. Vague recently published a book called the Paradox of Debt:
A New Path to Prosperity Without Crisis (Published by the
Pennsylvania University Press/available at Amazon and
elsewhere).
Mr. Vague said that he believed that the U.S. economy is slowly
steadying and that in comparison to other parts of the world it’s
in "okay shape".

The Chinese economy. for example, is being greatly weakened by "out
of control private sector debt."
In the United States, Mr. Vague, said the Federal Reserve has
overdone interest-rate hikes, and they seem to be bound to stay too
high for a while.
He also noted that the housing sector is still a worry as there are
only an inventory of 800,000 unsold houses in the country; at the
time of the 2008 economic disaster there were 2 million unsold
homes.

Home sales are the most important swing factor in the American
economy, a satisfactorily large inventory of unsold houses -- if
paired with more reasonable interest rates -- contributes to
spurring economic growth.

At the same time, Mr. Vague noted that there are areas in that
sector that are "booming", such as warehousing, Special Laboratory
Spaces, and Medical Spaces.

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