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Economy: Fed Chairman Ben Bernanke, in a much-anticipated speech at the central bank's annual Jackson Hole gathering, said he has no immediate plans to do anything dramatic. To which we say: good.
Three years of hyperactive policy intervention, during which the Fed has printed trillions of new dollars, clearly hasn't worked. Why pile one failure on top of another?
Even so, Bernanke told the Jackson Hole, Wyo., gathering he has still more tricks up his sleeve, and hinted he might unveil something next month. "The Fed has a range of tools that could be used to provide additional monetary stimulus," he said.
More tools? If this were a gunfight, Bernanke would be out of bullets. Two rounds of quantitative easing since 2008 have pumped an estimated $2.3 trillion into the banking system. What do we have to show for it?
On Friday, the Commerce Department reported that the economy grew just 1% in the second quarter, below the 1.4% first estimated. For the entire first half, GDP was up just 0.7%, a pathetic performance this far along in a recovery (see accompanying editorial at right).
Fact is, the economy seems to be sliding, despite the massive Fed stimulus of zero percent interest rates and more than $2 trillion in newly printed money.
The Congressional Budget Office warned last week that unemployment would likely remain above 8% for years to come, while this year's federal deficit would again hit $1.3 trillion — despite White House promises deficits would be falling fast by now.
Why haven't the Fed's actions worked? Because our problems today aren't monetary in nature. They're fiscal. As such, printing more money won't help one bit. Our economy suffers from too much spending, too many regulations and far too much uncertainty. Businesses lack confidence. The Fed can do nothing.
Corporate profits set a record of $1.54 trillion in the second period. Ordinarily, this would fuel a massive growth spurt and millions of new jobs. Not this time.
Companies aren't investing their estimated $2 trillion in cash in job-creating activities. Seeing the policy confusion and ineptitude of a White House wedded to the Keynesian delusion that all problems can be solved with more government spending, they're sitting on the sidelines.
Just Friday, Vice President Joe Biden, apparently not getting the memo on Obamanomics' failure, called for "more stimulus."
In such an environment, no amount of Fed easing will help. It's what economists call pushing on a string — with no demand for loans, creating more money won't help. It will only create inflation.
No real recovery is possible until the government makes deep cuts in spending that has surged nearly 40% since the 2007 financial crisis. If it can't , the economy will continue to languish.
As for the Fed, it's done too much already, with little to show for it. Our advice to Bernanke for the Fed's September meeting: Don't just do something, stand there.
Economy: If you needed another metric by which to measure the failure of Obamanomics, new numbers released Friday show that two years after the recession ended the economy still hasn't fully recovered. According to the revised gross domestic product data released Friday, the nation's economy ...
Politics: Having seen its agenda falter, the AFL-CIO announces that in 2012 unions will scale back working in tandem with the Democratic Party and instead set up its own structures to support candidates. In politics, hell hath no fury like a union scorned, and AFL-CIO President Richard ...
Leadership: A big protest in Latin America normally doesn't merit the time of day. But when the target is free markets — and it happens in Chile, one of the few nations that has them — then there's a leadership problem. President Sebastian Pinera, who impressed the world with his ...
When it comes to energy, America is lucky to be next to Canada, whose proven oil reserves are estimated by Oil and Gas Journal at 175 billion barrels. This ranks just behind Saudi Arabia (260 billion) and Venezuela (211 billion) and ahead of Iran (137 billion) and Iraq (115 billion). True, about ...
It is one of the enduring mysteries of American history — so near-providential as to give the most hardened atheist pause — that it should have produced, at every hinge point, great men who matched the moment. A roiling, revolutionary 18th-century British colony gives birth to the ...
Posted By: Frac Facts(655) on 8/26/2011 | 11:52 PM ET
Now isn't that Ironic? Holding the meeting in Jackson Hole, Wyoming; playground of the Rockefellers, with Joe Biden in attendance representing an administration that wants to raise taxes on the rich! No wonder nobody takes these jerks seriously!
Posted By: dwdrury(4720) on 8/26/2011 | 11:13 PM ET
Nice to see Bozo Joe continue his 30 year streak of never having a correct analysis. Some things do have to stay constant.
Posted By: MCSF(255) on 8/26/2011 | 8:21 PM ET
Its one thing to fight recession with monetary stimulus, and it may have been a good idea, but without needed Fiscal Policy from Washington it was TOTALLY pointless. The Fed should be telling our communist pres to get his head out of his X. Its not the Feds job to make up for lack of leadership in the whitehouse. Expanding Fed power was passing the buck.How typical of the Dems. Oh the other hand, Keynes theory didn't work because we never paid back the bill in good times.
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