Bernanke Fails to Take Responsibility for Dismal Outlook
November 3rd, 2011The Federal Reserve completed another FOMC meeting yesterday, one of eight throughout the year. Most of the statements following FOMC meetings are made up of empty rhetoric on how the Federal Reserve is stabilizing economic conditions and growth will continue at a slow, yet steady rate. It seems to be the same message every time, summed up as such: Don’t worry we have this all under control, keep watching TV and eating junk food.
This meeting proved to be different this time around. Bernanke has expressed his worries about the economy in the past, but it has been quite sometime since the Fed Chairman has skipped most of the ‘slow and steady’ recovery talk and addressed the numbers in employment and economic growth and the way they’re falling. The Fed’s prediction shows the overall economic growth dropping from 2.9% (projected back in June) to 1.6% by next year. With this kind of information Bernanke is having a hard time swallowing the fact that, “…consumer confidence is about where it was in the depths of the recession. That’s very discouraging.”
The Federal Reserve is “in charge” of maintaining interest rates and stabilizing inflation, which are some of the key factors in the current economic problems. Each of these tasks are met with the printing of money. Lower interest rates increase borrowing (allegedly), increased borrowing means more money is in demand, and we all know where the Fed gets their money from – reach up into the sky and grab a big hand full!
Inflation has been a target point with countries around the world experience a spike in energy and food prices. Core inflation is the rate monitored by the Federal Reserve and excludes food and energy, because of their volatility. Headline inflation includes it all, but is political suicide for those that are pro-Fed to address it. Factors outside of the Fed can influence prices (ie: natural disasters) however most End the Fed’ers recognize inflation not as the price tag on the goods but the price tag on the dollar. Fundamental difference in language between the Fed and free market economists.
So while the projections of improvement are lowering, Bernanke is hanging his head in despair while pointing the finger at all the reasons the economy is not recovering like they had predicted. The printing of money out of thin air is never mentioned as the culprit, or even a piece of the puzzle at all an article today that covered the FOMC’s statements. Here is what we are to blame:
- Congress, because they remain gridlocked in partisanship.
- Government, because they need to be creating more jobs.
- Greece, because the chance of default is alive and well.
- Europe in general, what they do affects us.
- Japan’s earthquake and tsunami.
- Just pure “bad luck”.
The last one killed me. “Bad luck”? Yes, if that means the Federal Reserve slipped on a banana peel and their finger landed on the ‘print’ button, sure – damn the luck! But by not acknowledging the fact that an elastic currency is to blame for the disgustingly slow recovery is ignorant…and in this case most likely purposeful. If you continue to pull the wool over the eyes of many allowing these policies to continue, we’ll continue this slow and non-existant recovery, but someone is benefiting…don’t you worry.
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