Bernanke describes how bad the labor market is

Here is part of Bernanke's talk on Tuesday to the New York Economic Club:

Moreover, many other features of the jobs market, including the historically high level of long-term unemployment, the large number of people working part time because they have not been able to find full-time jobs, and the decline in labor force participation, reinforce the conclusion that we have some way to go before the labor market can be deemed healthy again. . . .

The China currency mess

If China wants to subsidize our purchases of their goods, that is fine with me. Where China is getting its wealth is from stealing our intellectual property, not from selling us their products at below cost. The Obama administration isn't doing what is right and oppose the new law being debated this week in the Senate. Unfortunately, the initial vote yesterday only had 16 Republicans and 3 Democrats opposing penalties on China for a low exchange rate. From the Financial Times:

The chairman of the US Federal Reserve has accused China of damaging prospects for a global economic recovery through its deliberate intervention in the currency market to hold down the value of the renminbi.
Speaking just hours after the Chinese government sharply criticised a US congressional bill that would punish Beijing for alleged currency manipulation, Ben Bernanke told a congressional committee that an undervalued renminbi was preventing the rebalancing of global demand towards emerging market economies.
“Right now, our concern is that the Chinese currency policy is blocking what might be a more normal recovery process in the global economy,” he said. “It is to some extent hurting the recovery”.
The US Senate voted overwhelmingly on Monday to open debate on a bill, clearly aimed at China, that would impose tariffs on imports from countries with undervalued currencies. On Tuesday, the Chinese government blasted the bill in three statements released simultaneously by the foreign ministry, the central bank and the ministry of commerce, saying the legislation could spark a “trade war”. . . .

"Bernanke: Recovery 'close to faltering'"

Given how incredibly slow the economy has been growing, this news isn't very surprising.

Europe has a debt crisis. America has a jobs crisis. Corporate profits could be in trouble. World financial markets are in turmoil. And no one seems prepared to ride to the rescue.

Federal Reserve Chairman Ben Bernanke bluntly warned Congress on Tuesday of what most of America has sensed for some time: The economic recovery, such as it is, "is close to faltering."

The central bank chief spoke on a day when the stock market spent most of the trading hours in bear market territory — down 20 percent from its most recent highs in April. A late-day rally helped the market finish higher.

Bernanke's exchange with lawmakers seemed to capture the growing belief that no one is prepared to help the global economy in any meaningful way anytime soon. Speaking in unusually frank terms, he also captured the nation's sour economic mood. . . .

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. . . .

New Fox News Op-ed piece: Bernanke Doesn't Deserve a Second Term

My newest Fox News piece starts this way:

Treasury Secretary Timothy Geithner has been warning that a refusal by the Senate to reconfirm Federal Reserve Chairman Ben S. Bernanke will be "very troubling" for financial markets. But this is just the lawmakers usual scare tactics: do as they like or else we are in for a disaster. We are getting tired of hearing it. Looming imminent “disaster” has been conjured up to motivate us to fund bailouts, massive government spending programs and huge increases in the national debt. Those fears weren't justified then, and they aren't justified now.

Despite Mr. Bernanke's obvious academic expertise on the Great Depression, he shouldn't be reconfirmed. The Federal Reserve's extreme powers have rarely been as overused and misused as they have been by Mr. Bernanke.

To name just one example, his mishandling of the Bank of America and Merrill Lynch merger is very disturbing. . . .