The Federal Reserve chairman, Ben S. Bernanke, offered a grim assessment of the nation’s economic health Tuesday, telling a Congressional committee that “the recovery is close to faltering.”
Mr. Bernanke said that the Federal Reserve has acted forcefully to support growth and that it stood ready to do more. But he emphasized that the rest of the government also needs to act on problems including the federal debt, unemployment, housing, trade, taxation and regulation.
“Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the U.S. economy,” Mr. Bernanke said. “Fostering healthy growth and job creation is a shared responsibility of all economic policy makers.”
Mr. Bernanke began his testimony Tuesday by repeating his basic assessment that the economy has grown more slowly than expected, because of unexpected setbacks like the Japanese earthquake and the European debt crisis and because of domestic problems like the ongoing housing crisis.
“The recovery from the crisis has been much less robust than we hoped,” he said, although he also reiterated that the Fed expects faster growth going forward.
The Fed’s primary policy focus is on the pace of price increases, or inflation, which it seeks to maintain at a steady annual rate of about 2 percent. Prices have increased more quickly over the last year, but the Fed has predicted that the increases will abate, and Mr. Bernanke reiterated that forecast Monday.
What a joke!! There has been NO recovery by 0-bama and his idiots. He has wasted trillions on his special interests, unions, so called green jobs, shovel ready projects (that didn’t exist), solyndra scandals, and fast and furious. The results include no jobs and 0-bamacare which if not rejected by the Supreme Court will destroy America!! What recovery??
Failure of the recovery has been what the wealthy special interests behind the GOP have been working for since the 2008 economic melt down and the subsequent election of Barack Obama. Their only hope of regaining control depends on pinning all blame for the recession and the events leading up to it on the democrats, while making damn sure that mainstream America sees no improvement while Obama is in the White House.
What special interests have needed to do to curtail recovery has only increased their own profits. Kicking the crap out of average American workers and the American middle class while lying to them about long-term intentions has thus far been a win/win proposition.
Greg, you have kindergarten mind…don’t try to tackle a Grad School question. There was no recovery in the 2008 through Nov 2010 period when the republicans were an unconsulted and shut out minority with no influence…
The economy depends heavily on consumer spending, and new job production depends heavily on entrepreneurs betting on growth of their market….and betting their life savings and cash reserves in the current environment is suicidally crazy.
Grownups know actions have consequences, and Obama’s actions have kept entrepreneurs wondering about what else the Regime plans to throw at them in the way of taxes, regulations, health care costs, inspections, union thugs, wage controls, and the lack of consumer confidence (and consumer spending). Consumers are scrambling to secure their retirement accounts and beef them up in the face of declining stock prices, not spending on anything not immediately necessary. Both conditions are detrimental to the economy and both are incontrovertibly due to Obama’s policies…No Republican bogey man under the bed could scare entrepreneurs and consumers a fraction as much as Manchild Barry-boy Hussein Mbwebwe Obama and his radically ignorant friends have done and continue to do, with no end in sight (until Jan 2013).
Greg, have another shot of Kool Aid and back to the kindergartin classroom. Let me remind you Democrats controlled all three branches the federal government when your boy took office. During that time trillions got spent and what did it do to our national debt and uemployment rate?? Now we have fast and furious, the solyndra scandal, and your boy blaming everyone but himself. Your ignorance and blame game are annoying and soon will be over.
@kalashnikat, #3:
You’re correct in saying that the economy depends heavily on consumer spending.
So tell me this: How does that observation fit in with republican economic policies that for three decades have shifted an ever-growing share of income and wealth away from America’s working and middle classes–the very consumers whose spending drives the U.S. economy–in favor of a an extraordinarily wealthy upper class whose members simply aren’t numerous enough to make up for the lost mainstream consumption? Why wouldn’t we expect republican plans for further cuts in middle and working class wages, benefits, pensions, Social Security benefits, etc, to reduce spending by America’s largest groups of consumers even more?
Any policy having the primary effect of making the richest even richer is not going to be of any direct benefit to the U.S. economy or the average American citizen. More often than not, it will turn out to be detrimental.
Greg,
You’re entitled to your own opinion but not to your own facts…the great gap between rich and poor has widened more since the Democrat controlled congress set up the housing and financial dominos through Freddie and Fannie, and triggered the current crisis…folks who could not possibly repay were given loans, and banks were told to give them or else…and republican calls for regulating the sale of the productts that the Government had forced the banks to find funding for were ignored.
From NY Times – September 11, 2003
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ‘‘The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
Bush and other republicans called repeatedly for the situation to be reined in but Barney the Purple-helmeted Frank and his Dem friends on the banking committee just pressed on…He has admitted as much himself.
From Larry Kudlow:
For years, Frank was a staunch supporter of Fannie Mae and Freddie Mac, the giant government housing agencies that played such an enormous role in the financial meltdown that thrust the economy into the Great Recession. But in a recent CNBC interview, Frank told me that he was ready to say goodbye to Fannie and Freddie.
“I hope by next year we’ll have abolished Fannie and Freddie,” he said. Remarkable. And he went on to say that “it was a great mistake to push lower-income people into housing they couldn’t afford and couldn’t really handle once they had it.” He then added, “I had been too sanguine about Fannie and Freddie.”
When I asked Frank about a long-term phase-out plan that would shrink Fannie and Freddie portfolios and mortgage-purchase limits, and merge the agencies into the Federal Housing Administration (FHA) for a separate low-income program that would get government out of middle-income housing subsidies, he replied: “Larry, that, I think, is exactly what we should be doing.”
Frank also said that any federal housing guarantees should be transparently priced and put on budget. But he added that the private sector must be encouraged to re-enter housing finance just as the government gradually withdraws from it.
You claim the republicans have been sapping the middle class…put up facts to back that up (if you can)…republicans have been for lower taxes to keep money in the hands of the middle class and keep the economy revving so that everyone’s lot improves…(except those who don’t work for pay but collect government checks).
Facts, mind you, not slanderous unsupportable talking points.
@kalashnikat, #6:
Sapping? Their policies have been gradually bleeding the middle class dry. That just hasn’t been apparent because we’ve been running up debt to hide the upward transfer of wealth. We’ve set up a system that has allowed the richest to rapidly become even richer by paying the nation’s bills with borrowed money instead of taxes.
Follow the money upward and take note of the coinciding growth of debt, and then consider the current GOP agenda:
The American middle and working classes are in economic decline, with their economic futures becoming increasingly uncertain, while the wealthiest classes are obviously growing increasingly wealthier. Given this trend, the GOP is pushing for even lower corporate tax rates, even lower capital gains tax rates, and and even lower top income tax rate, along with a dramatic rollback social programs that primarily benefit the working and middle classes.
A fundamental republican premise is that the interests of 90 percent of the American population are best served by doing everything possible to benefit the top 10 percent. THIS PREMISE IS TOTAL BULLSHIT. The 90 percent are best served by focusing on the needs and problems of the 90 percent. The wealthiest can take care of themselves. They don’t need any special favors, considerations, or encouragements.