Bernanke: Efforts Failed to Produce Recovery With 'Sufficient Vigor'

[Kurt_and_Hunter]

Bernanke: Efforts Failed to Produce Recovery With 'Sufficient Vigor'

By LUCA DI LEO And JON HILSENRATH

Federal Reserve Chairman Ben Bernanke reiterated his dissatisfaction with the course of the recovery Friday and suggested the Fed may downgrade its forecast for economic growth when it next meets. His comments came during a largely academic speech at Princeton University on lessons learned from the financial crisis.

"Although financial markets are for the most part functioning normally now, a concerted policy effort has so far not produced an economic recovery of sufficient vigor to significantly reduce the high level of unemployment," he told a conference at the Ivy League university where he taught from 1985 to 2002.

After its most recent policy meeting Tuesday, the Fed said it was prepared to take new steps to quicken the pace of economic growth if needed, mostly likely purchasing more U.S. Treasury securities to drive down long-term interest rates and encourage borrowing. The Fed chairman's expression of dissatisfaction with the recovery and with stubbornly high unemployment could help reinforce a view among investors that the Fed is on course to act in the months ahead.

The Fed's decision about whether to act depends in part on its outlook for growth in the months ahead. Mr. Bernanke said the central bank's current projections for the economy are not out of line with those of private-sector economists, a possible hint that the Fed could mark down its formal forecast for growth. The Fed's latest public forecasts for growth was in June, when it projected the economy will grow by more than 3.5% in 2011. That's much higher than private-sector economists' predictions, made earlier this month, that the economy would grow by 2.8% next year.

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http://online.wsj.com/article/SB10001424052748703499604575512242273196062.html

[SoCalDem]

1. in other words,

"We F'ed it up, by not concentrating on Main Street and gave all the money to the creeps who started the mess".

[dkf]

2. Business needs some certainty on taxes otherwise they can't do any planning.

We need to get this over with already.

[Trajan]

3. Why is it only the government's responsibility to prime the pump ...

WHERE the fuck is BUSINESS on this question ?

Why are they holding back ? ... They are FLUSH with cash, and surely they don't believe that the private sector has no role whatsoever in creating demand ...

You wanna strong recovery ? ... BOOST WAGES, and watch the goods fly off the shelf ....

It's the fault of right wing 'LOWER WAGES TO BOOST PROFITS' philosophy that got us into this mess ...

One thing that should have been recognized long ago: Auto Workers .. You know, those 'overpaid' union members of the work force who are slimed and denigrated at every opportunity ?

THOSE auto workers don't have trouble buying cars - It's the rest of the poor huddled NON union workers who have either fallen off the economic map, or who struggle to provide basic necessities for their families and cannot afford to buy new washing machines, homes, or automobiles ....

The union workers ? .... They can buy all the cars and homes and washing machines they need ....


Wanna end this malaise ?? .... INCREASE wages .... and stay out of the way as families rush to the showroom ....

[Kurt_and_Hunter]

4. No business can or should ever be expected to be altruistic

If businesses perceive it as being more profitable to sit on the money then that is what they will do.

Businesses are not ethical constructs, they are mathematical input-output systems.

If business is behaving in an overly malign way then it is the government's responsibility to alter that behavior using incentives or disincentives.

As for the government's responsibility to prime the pump... of course it's the government. The government can take a "bad deal" in direct dollar terms for the long-term national good.

No corporation can or should be expected to. They have a legal responsibility to their share-holders to avoid bad deals.

(Which puts all corporate charitable work in perspective... if it wasn't big-picture profitable they wouldn't do it. Much charity is cheaper good will advertising than any other form of self-promotion.)

[Trajan]

5. Gee ... Thanks for the apologia ...

But let's face the fact that IF the economy falls on it's face, then everybody is going to lose their shirts, and a whole lot more ...

An extended depression stops the profits from rolling in ...

So fuck'm .... Bring on the depression: I can eat what I find in the fields .... I hope your kids can do the same ...

Perhaps they can stare and a picture of the laffer curve and read one of Phil Gramm's many missives about the wonders of the marketplace ...

[xchrom]

6. Gee Ben, ya think? Nt