Larry Summers: The Economic Worst has Passed

(CBS)

National Economic Council Director Lawrence Summers said Friday that despite bad news on the unemployment front, the worst of the economic downturn "is passed," arguing that "we're going to see a basic pattern of recovery."

"The challenge is going to be is to make that recovery be as strong and robust as we can," he said at the First Draft of History conference in Washington D.C.

Summers said the unemployment numbers weren't a surprise, as "the process of convalescence is never…completely smooth." Still, he said, "we're in a very different place than we were nine months ago."

He pointed to a decline in the rate of job loss and positive GDP growth, and noted that "discussions of Depression that were pervasive nine months ago aren't where the economy is" today.

The Obama administration advisor acknowledged, however, that "it's going to be a while" before the economy is completely back on track, adding: "We've got an enormous amount to do."

Summers, following the lead of Vice President Joe Biden, praised the effects of the economic stimulus package, saying it kept policemen and teachers from losing their jobs. He said there was still progress to be made in areas such as digitizing medical records, stating that the average hospital has worse information technology capabilities than the average supermarket.

Summers declined to directly address questions about a second stimulus package, saying he doesn't know exactly what the phrase means. He said "we certainly need to continue to support people who are in need," and stressed the importance of "continuing public investments."

Asked about the budget deficit, he said it's an important issue but suggested that it isn't a reason to refrain from public investment.

"We're not going to have a healthy budget in a profoundly unhealthy economy," he said.

Asked if companies should be allowed to be "too big to fail," Summers said regulatory reform was "absolutely essential." He pointed to the need for higher capital standards, a "harmonization of regulation" and resolution authority.

Summers said officials should never again be in the position of having to decide between a "problematic bailout" and "chaos and collapse."

Brian Montopoli

Brian Montopoli is the national reporter and political analyst for CBSNews.com.

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