6/24/2011

Bernanke: "We don't have a precise read on why this slower pace of growth is persisting"

From the Associated Press:

Fed Chairman Ben Bernanke told reporters Wednesday that the central bank had been caught off guard by recent signs of deterioration in the economy. And he said the troubles could continue into next year.
"We don't have a precise read on why this slower pace of growth is persisting," Bernanke said. He said the weak housing market and problems in the banking system might be "more persistent than we thought."
It was the Fed chief's most explicit warning yet that the economy will face serious challenges next year. For several months, he had said the factors working against economic growth appeared to be "transitory."
The Fed cut its forecast for economic growth this year to a range of 2.7 percent to 2.9 percent from an April forecast of 3.1 percent to 3.3 percent. It also cut its forecast for next year to a range of 3.3 percent to 3.7 percent from an earlier 3.5 percent to 4.2 percent. The Fed also said unemployment would stay higher than it had expected earlier.
In a policy statement issued at the end of a two-day meeting, the Fed blamed the worsening economic outlook in part on higher energy prices and the earthquake and tsunami in Japan, which slowed production of cars and other products.
But at a press conference afterward, the second of what the Fed says will be regular question-and-answer sessions with reporters, Bernanke conceded the economy's troubles are more puzzling and potentially more long-lasting than a pair of temporary shocks. . . .

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2 Comments:

Blogger Chas said...

Markie Marxist sez: "Ha! Ha! The US capitalist economy isn't doing so well, but my commie compadre Ben Bernanke says he doesn't know why. My commie compadre, Comrade President Obama is sinking the US capitalist economy under a crushing debt and that's having a depressing effect on people. It's sort of like a Carteresque "malaise". Malaise is like mayonnaise that's been sitting out too long, so that it makes people sick. All your economic salmonella is belong to us! Ha! Ha!"
"We Marxists are pissing in the public's face and telling them that we don't know why it's raining, but we'll be glad to sell them another umbrella for it, in the form of another stimulus package (after the last two stimulus umbrellas that we sold them fell apart) that we'd be glad to put on the national credit card for them, on top of the debt we've already dumped on them."
"Our Marxist solution is more of the problem! Ha! Ha! Funny how that just happens to happen when we Marxists work on a capitalist economy. I really can't believe that we get away with this, but my Marxist amigos in the media are so onboard with us that they're blind to the process and the public is largely clueless. Wait till Comrade President Obama's second term - it's going to make socialism compared to capitalism seem like paradise compared to hell! Funny how things are going in that direction. I wonder why? Ha! Ha!"

6/24/2011 6:53 AM  
Blogger Steve Bratten said...

Mr. Bernanke'as education is incomplete or at least he needs a review. Consider the following:
1. You cannot push a rope (Keynesian economic theory has its limits).
2. People do not invest and take risks when they cannot determine the risk environment (taxes, healthcare costs, regulations, etc.).
3. Also, please review the Laffer Curve.

6/24/2011 7:54 AM  

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