Federal Reserve Chairman Ben Bernanke gave a press conference today to address the ailing economy. The Fed’s solution? Nothing—they’re out of options. Their message? We’re screwed. Good times!
Well this should make you feel safe as a kitten: After a rocky month of economic news—unemployment going back up, housing market going back down, federal debt limit approaching, stock market all over the place—Federal Reserve Chairman Ben Bernanke gave a press conference today to discuss how the Fed will address the still-ailing economy.
Bernanke stepped up to the mic and outlined his plan, which is: nothing.
Literally—nothing. In so many words, Bernanke said simply that the Fed had already done all that it can do. He downgraded his outlook for America’s economic future for the next couple of years, said not to expect any new stimulus measures or interest rate cuts, and left it at that.
The Wall Street Journal reports, “Bernanke said Wednesday that the U.S. economy was recovering more slowly than expected, but central bank officials gave no indication they intend to take new steps to boost growth and jobs,” adding, “Although the Fed is less comfortable with the economic outlook, it has less leeway to take new steps to fix it. That’s because underlying inflation also has crept up, making the central bank leery of injecting more money into the financial system.”
Employment has recently declined once again, just as inflation has gone up, thereby depleting consumers’ spending power when they’re hurting most.
Dishearteningly, Bernanke told reporters, ” We don’t have a precise read on why this slower pace of growth is persisting.”
Without new stimulus spending to spur employment and without the ability to lower the federal interest rate (it’s basically already at zero), the Fed seems to be simply running on empty, without tools or power to improve our collective lot.
Economic hopefuls have suggested that temporary conditions like Japan’s earthquake have interrupted the global supply chain, and are largely responsible for the recent economic regression.
Concluding his remarks, Bernanke had this to offer: “I think it is an appropriate balance to attribute the slowdown partly to these identifiable temporary factors but to acknowledge the possibility that some of the slowdown is due to factors which are longer-lived and which will be still operative by next year.”
The long and short of it: the economy is adrift, without a rudder. Is this what Ron Paul means when he says “end the Fed”?