SALON

Friday, Aug 26, 2011 3:01 PM UTC

Bernanke: No treason, no help for Obama

In his anticipated speech, the Fed Chairman delivers a big dud. Message to White House: Don't look for help here

By

Topics: Ben Bernanke, U.S. Economy, How the World Works,

Bernanke: No treason, no help for ObamaFederal Reserve Chairman Ben Bernanke

Rick Perry must be feeling mighty satisfied. Two weeks ago, the governor of Texas and presidential candidate declared that any effort by Federal Reserve Chairman Ben Bernanke to use monetary policy to stimulate the economy between now and the election would fall under the category “treason.” Today, in a highly anticipated speech that many observers expected to outline some form of action to address the slumping U.S. economy, Bernanke proved himself a true patriot. He promised absolutely nothing.

I’ve read and watched more Bernanke speeches than I care to remember over the past five years, and I can’t think of one that contained less content or meaningful analysis — aside from a few jabs at legislators for the debt ceiling negotiation fiasco. Not only did Bernanke decline to announce any new initiatives to address the fact that unemployment is still over 9 percent, — and, according to the latest GDP revision, economic growth for the first half of the year grew  a pathetic .7 percent, he didn’t even specify in any detail what the Fed could do if it was so willing. Instead, he pronounced himself “optimistic” as to the long-term growth potential of the U.S. economy.

“It may take some time,” said Bernanke, “but we can reasonably expect to see a return to growth rates and employment levels consistent with those underlying fundamentals.”

In the meantime, we’ll do zip. Not my problem, was the message, loud and clear. I wonder if President Obama is finally regretting his decision to reappoint Ben Bernanke to a second term as Federal Reserve chairman.

The only section of the speech that contained an interesting nugget came in an oblique reference to whether government should be doing anything to spur employment in the short term.

“Normally,” said Bernanke, “monetary or fiscal policies aimed primarily at promoting a faster pace of economic recovery in the near term would not be expected to significantly affect the longer-term performance of the economy. However, current circumstances may be an exception to that standard view…”

Bernanke went on to argue that since the “extraordinary high level of long-term unemployment” could be expected to harm the long-term prospects of the economy, boosting jobs now could help later.

Under these unusual circumstances, policies that promote a stronger recovery in the near term may serve longer-term objectives as well. In the short term, putting people back to work reduces the hardships inflicted by difficult economic times and helps ensure that our economy is producing at its full potential rather than leaving productive resources fallow. In the longer term, minimizing the duration of unemployment supports a healthy economy by avoiding some of the erosion of skills and loss of attachment to the labor force that is often associated with long-term unemployment.

Well, yes. So what are you going to do about it, Mr. Chairman?

The answer, today, was nothing.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.

Next Article

You Might Also Like

More Related Stories

Featured Slide Shows

Gripping photos: The people of the Turkey protests (slideshow)

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • The protests take on a festive element as police forces move out of the park and square. Wearing a gas mask, this young man dances to traditional Turkish music in front of Taksim Square’s Ataturk Monument.

  • In Gezi Park since March 31st, this protester, originally caught off-guard by the Government’s teargas and water cannons, went out and bought a Russian army mask from WWII, preparing for what was to come.

  • This rambunctious boy seems to be enjoying the chaos. After taking this picture he threw a stone at the already destroyed building in the background.

  • Forming a line, the police face off directly with protesters in Taksim Square. After a while, they retreated and there was a general cheer – a back-and-forth dance that has been common since the beginning of this protest.

  • An elderly woman in Gezi Park reads the news. The tent community occupying the park was violently destroyed on June 16th.

  • Many different groups had set up booths to promote their cause in Taksim Square and Gezi Park. Standing in front of one, this man waves his flag while posing with conviction.

  • Many home-remedies are used to minimize the effects of tear gas. This woman has put a milky solution on her face, removing her mask after the tear gas dissipated. Before sunrise, the police came again for another round of teargasing.

  • People capitalize on the uprising -- selling flags, beer, gas masks, sky lanterns and spray paint to name just a few of the popular items.

  • On Monday morning, June 11, the police execute a strong offensive. Many plain-clothed police officers, like the ones seen here, clash with protesters in the side streets away from the main stand-off in Taksim.

  • The authorities seem to be most aggressive in the night, pushing protesters away from the square and park. After being teargassed this young woman catches her breath with other protesters on Siraselviler Street.

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

More Related Stories

Comments

 34 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: "We Are All Completely Beside Ourselves": Growing up primate

Recommendations