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Fed chief Ben Bernanke said he was "dissatisfied" with the pace of the economy's growth.
With the economy mired in the worst downturn in decades, Fed Chairman Ben Bernanke has been taking heat from all sides.
Even as the Federal Reserve issued a gloomier outlook for job growth and the economy, Bernanke defended the central banks’ latest decision to sit back, watch for more hopeful signs of growth and hope that its 3-year-old, cheap-money policies will eventually kick start a solid recovery.
“As I've said before, I understand that many people are dissatisfied with the state of the economy,” Bernanke told reporters following a regular two-day meeting of policymakers. “I'm dissatisfied with the state of the economy. Unemployment is far too high.”
In an update of economic projections it issued in June, the Fed lowered its growth outlook for the next three years. Gross domestic product is now seen growing at just 1.6 percent this year (down from 2.8 percent in the June foredcast) and just 2.7 percent next year (down from 3.9 percent).
The expected lower growth prompted the Fed to raise its predictions for the unemployment rate -– to a stubbornly high 8.6 percent by the end of the year, up from a projection of 7.8 percent five months ago. Central bankers now predict that the jobless rate will remain above 7 percent through 2014.
In a 45-minute session with reporters, Bernanke alternated between defending the Fed’s actions since the global financial system collapsed in 2008 and sympathizing with critics who say the Fed hasn’t done enough. But he insisted that Fed policies have made a difference.
“Our best estimates are that, absent the support of monetary policy, that the economy would be in a much deeper ditch and that unemployment would be much higher than it is,” he said
But he conceded that “the pace of progress is likely to be frustratingly slow."
Some of the criticism has come from the left, including the widening Occupy Wall Street protest movement, which faults the Fed for bailing out bankers who made the risky bets that led to the collapse. Those critics, Bernanke said, don’t fully understand the reasons for the Fed’s massive intervention following the financial meltdown.
"A very simplistic interpretation of that was because we wanted to preserve bankers' salaries,” he said. “That obviously wasn't the case. What we were doing was trying to protect the financial system in order to prevent a serious collapse of both the financial system and the American economy."
The Federal Reserve chairman responds to a question about Occupy Wall Street, saying he understands frustration with the economy. "I am dissatisfied with the state of the economy," Bernanke said. "Unemployment is too high."
Bernanke has also been a target of criticism from the right for dumping trillions of dollars of newly created cash into the economy to blunt the impact of a massive credit contraction in 2008. Several Republican presidential candidates have attacked that policy on the grounds that it risks promoting runaway inflation. Those criticisms are also misplaced, Bernanke said.
“We have kept inflation close to 2 percent on average, which both has avoided the problems of high inflation, but also very importantly has avoided the risk of deflation we've seen in other countries," he said. “That deflation can be a very pernicious problem and difficult to get out of once you are there. So we have been able to achieve, on average, stable prices."
In any case, Bernanke said, political opposition to Fed policies would not sway the central bank. Though he acknowledged that the Fed needs to be accountable to Congress, he vowed to continue making policy based economics, not politics.
"Politics is politics, and the Federal Reserve tries to stay nonpartisan,” he said. "Our job is to do the best we can for the U.S. economy, to do what we can to attain our mandate of maximum employment and price stability."
The Fed chairman also noted that the central bank can’t revive economic growth and reduce unemployment by itself, saying “it would be helpful” if Congress and the White House did more to support job growth. He also noted that the Fed has little control over decisions made by European policy who continue to wrestle with a widening debt crisis that threatens to plunge Europe into another recession.
Related:
With few options, Fed turns to 'jawboning'
Word cloud of Fed statement
Fed's latest projections
Click here to watch the full news conference:
The Federal Reserve chairman speaks on the health of the economy, saying growth will be "frustratingly slow," and takes reporters' questions. Watch the whole news conference.
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Eventually will begin in November of 2012. Trillions down the drain with no benefit is what has happened for the last three years. Socialist rulings by the King and his court is what we have had.
When will people learn that the government doesn't create jobs, they only create taxes.
This is what happens when you bailout only half the economy. We can expect another 10 years of no help for housing and no help for jobs. Start planning for that now.
Who would be dumb enough to give a mortgage to anybody in a falling market. I guess Bernake is.
And it will never be enough Bill. If they don't spend it, they can't justify taxing us for it.
Wow, straight off Mr. Obama's teleprompter when Mr. Obama talked about his FAILED STIMULUS #1 $ 862,000,000,000 payback to unions. What did he say......something like: "The Stimulus worked to keep us out of a Depression."
Mr. Bernanke, get in the unemployment linke behind Mr. Eric Holder. Mr. Geithner will join you very, very soon.
great. Now we're stuck on a ledge half way down a black hole with no way back up. Maybe businesses will begin to believe there's no more easy money coming there way and get back to doing business in the real world.
$16 trillion to offshore banks. Its past time for an audit of the private banker owned Fed and bringing back power to print money to Congress.
Your beliefs are built on ideology, not facts. Government does create jobs. And the trillions spent have created jobs. But all those cheap electronics, junk you buy at Walmart, foreign made cars, etc. have drained the economy of its money. That's the real problem . Stop blaming government and look at your spending habits!!! There is the real problem.
Obviously, this cretin hasn't been to the grocery store lately if he thinks that inflation is under control! Also, his misguided policy of pumping new money into the system has effectively devalued the Dollar against most foreign currencies. The Dollar has lost close to 20% of it's value against the Philippine Peso in the last couple of years and it's not doing much better elsewhere. The only reason it's not worse is that most of the other major economies aren't in much better shape.
If they fire the son of bitch then he'll be forced to go to the grocery store. I don't know who's more useless Bernanke or Obama it so close.
This Fed is making a big mistake by keeping interest rates this low. There are millions of people who were dependent on their savings earning some interest income and they were the ones spending, he has destroyed that segment of consumers. He wants us to borrow more and spend more and that's not going to work, low interest rates is not the solution. We need Democrats and Republicans to get together and fix this mess, really, this is not that difficult to fix. We all need to pay a price for all the mistakes in the past but we can fix it, our biggest problem is the corrupt politicians.
Bill; I'd say all the lost government jobs is a big reason why there is no growth - so the jobs the government did create are now gone - thanks to conservatives.
The only reason we saw any growth for several decades (until 2006) was the credit (card) bubble - there was no way that could have continued at the pace it had grown too, every stock on the market had no real money supporting them. Debt to Asset ratio can't be ignored long term.
The under employed is a very real problem - where are the young new buyers? Not a one of the vacant homes in our neighborhood have been filled - the young are still stuck in Mom and Dads basement, if the parents even still have their decent jobs.
We will be living in tribes before conservatives understand that you have to spend to make money - cutting every last government employee hurts all those middle-men who fed off of them - who needs a private business accountant, Realtor, walk in clinic (a big chunk of their income comes from job drug testing) etc if there isn't enough business to keep them afloat.
Damned if you do, damned if you don't...well I'll be damned...lol.
GVC stated:"Your beliefs are built on ideology, not facts. Government does create jobs. And the trillions spent have created jobs. But all those cheap electronics, junk you buy at Walmart, foreign made cars, etc. have drained the economy of its money. That's the real problem . Stop blaming government and look at your spending habits!!! There is the real problem."
Let's see, the government creates jobs. Are you talking those shovel ready jobs that last, what a year if your lucky? And when that time is up, it's what, back to the unemployment lines?
"And the trillions spent have created jobs"
That is a joke, and not a very good one I have to say. You spend what, maybe 100-200 thousand to create one job that will last not quite a year. Yep, that is great government spending policies. Any more funny jokes?
"But all those cheap electronics, junk you buy at Walmart, foreign made cars, etc. have drained the economy of its money."
Ever heard of doing a little research? Most of those "cheap electronics. junk you buy from Wal-Mart", are made in factories that are owned by corporations here in the U.S., and those making the "cheap junk" are just using the standards they are given by those U.S. corporations. So, if you have a bitch, take it to those corporations, they are the ones getting the profits from that"junk". "That's the real problem."
"Stop blaming government and look at your spending habits!!"
Though many have bad spending habits, they can never top that of this government.................. "there is the real problem."
They also stood by and watched, and even gave their blessings as those corporations moved many companies over seas and even South of the border. Or did you forget that part?
Those believers and participants of Occupy Wall Street have the right idea. The decline in America's economic power stems from unparalled greed by those on Wall Street, some in Congress, and many in corporate America. When this became a society of "me 1st," damn the results, the rest was inevitable. When being a politician became a job, not an exercise in public service, the interests of Congress took precedence over those of those of the electorate and an elitism was born; where the politicians say "I know what's best for the electorate" and ignore those who elect them. Another factor propounded by the courts is that the rights of an individual take precedence over the rights of the majority, which has been carried to the extreme. Although there is some validity to Corporate America's claim the US is unfriendly to business; it should look in the mirror to see what created that attitude in the first place. Notwithstanding, it's time we stop blaming each other and work together to regain the strength and pride that is the "United States of America."
Under the pretense of stimulating the economy, at least $3trillion went to bailout the WallSt FatCats. What began as $700 billion TARP become $2trillion "Stimulus" which mutated into Federal Reserve's QE1 and QE2.
In between these freebies to the FatCats were free loans by FOMC of the Federal Reserve (FR). The US Treasury followed with bailings to bankrupt GM and Chrysler and subsidies to the auto makers through "Cash for Clunkers." More bailouts to the Bankers under a bogus program called "Mortgage Modification," and at least $500million of free loans to the politically connected such as Solyndra under the rubric of "Federal job creation."
At the behest of the FatCats within the FR, a private corporation, USA abandoned the gold standard. This disconnect between gold and fiat currency allowed the FR to print unlimited quantity of currency for their member banks buy hard assets on the cheap while stealing trillions of dollars from American savers.
Bernanke and the Federal Reserve's cheap money policy has created America's financial meltdown, the Great Recession and the downfall of the USA that has been regarded as the vestige of economic might and stability.
Bernanke and FR have been issuing lies, propaganda, and scams to cover-up their treacherous ways. At the beginning of the '07 Crash, the propagandists hired by the FR spoke of "minor correction." When minor became major, they recast their prognosis as a "soft landing." When the economy crashed in 2008 and 09 despite massive "Stimulus" spending, FR brought out the heavy artillery from Madison Avenue, the "Spin Doctors," who magically identified the growth of "Green Shoots." When the Green Shoots turned out to be weeds, the next slogan was "Jobless Recovery." When there were too many jobless and no recovery, the Spin Doctors announced that the Great Recession is officially over in 2009.
More government economic intervention means levying more taxes to pay the promise of more food stamps, welfare, and unemployment benefits to the jobless and the homeless since the Chinese and Japanese have stop buying Treasury IOUs.
All i can say is: live by the sword, die by the sword. We have to live with our decisions. If someone overextended and got more house than they could afford, they lost their house to foreclosure. WELL THEN, why do the banks get a different set of rules. THEY OVER EXTENDED and they should have paid the price. PERIOD!!! In America, and in real capitalism, there are no bailouts, and the givt doesnt belong in business. BTW make every single one of the banks and companies PAY all the money back with interest!!! There Obama, then you can fund your jobs bill!!!
I'm no Bernanke fan but I get a kick out of a group of people who don't grasp evolution and can't get the science behind climate change, lecturing him on something as huge and complex as the world economy.
I'll say one thing for those people on the conservative side, they have the crust that only ignorance can truly nurture.
Bernanke fiddles while Wall Street burns.
I'm watching Benny now on CSPAN - he seems nervous, voice trembles at times and stutters. He is clearly very uncomfortable. How nice. We are PHUCKED.
Oh good, so you judge someone's competence and intelligence by the way they speak. I suppose you voted for Obama? Well guess what, Bernanke was a professor of economics at Princeton University, so he sure as hell knows more about the economy than most people out there.
Please, Bernake and his once-private-sector financial "expert" goons created the situation extant today. Deregulation of the banking industry started with administration financial advisors in past years (under Reagan, Clinton and Bush Jr.). All those "experts" were in bed with their industry's greed-mongers. For decades these financial "experts" touted that deregulation was necessary and totally safe and the banking industry would guide itself in ethics and sound business practices.
Look what finally surfaced around 2006-07: these "self-monitoring, expert-backed and supporters in the Bush and Obama administrations were all hiding and defending the fact bank's leverage levels were horrific (upward of 30:1), and banks were deliberately and serruptitiously packing up bad investments to sell off to others (passing their bad loans and decisions) off to others. The ratings bureaus were just as big of wh0res on this, still rating total junk-investments as AAA or AA.
End the Federal Reserve.
Damned if you do, damned if you don't. Simple minds will always make one or two sentence statements to explain anything, including the very complex situation that resulted in the economic meltdown in 2008. That's because they can't comprehend anything more in depth. The fact that our economy did not go over the cliff into a depression in 2008/2009 is almost a miracle, one that was barely averted by the quick and decisive actions of the Fed and both the previous and current Presidents. Then for anyone to think that our eoconomy is just going to bounce right back to where is was before 2008 is both short sided as well as either extremely ignorant or unethical if using the situation as a chance to villafy the people who have been tirelessy working to avert an economic apocolypse. It took 12 years for our economy to recover after the 1929 financial meltdown, and it should be no surprise that will take a number of years to recover from this latest disaster.
Harold - you state the above like it is fact.
Where did you gain all of this knowledge? If you are so smart and know all the answers why are you not in DC taking care of the problem?
All folks are intitled to their thoughts, not just you. Some of us including me believe what has been done in the last three years is really screwed up. Time will tell, but time won't help those that have been hurt today, tommorrow and for a long time by the current administration.
Butt-Head-Nanke is in way over his shiny head. Unqualified and Incompetent. But the Puppet-Masters at the FED need some Loser to speak on their Muddled behalf. When he's done there, he can always work for someone even more Incompetent-O-BUNGLE!
End the Fed! Bernanke to jail!
'Emperor's new clothes' I say!
“With the economy mired in the worst downturn in decades, Fed Chairman Ben Bernanke has been taking heat from all sides.”
That’s why he gets the big bucks.
End the Fed save the World Vote RON PAUL
That's what was done in the American Revolution. "End the Bank of England. Vote George Washington."
"We have kept inflation close to 2 percent on average..." he said.
Well, the operative word is average, because the increase in food, energy, healthcare, and tuition costs were definitely not kept close to 2% inflation.
If you factor in the tax breaks for the rich you'll see that the average cost of living hasn't risen at all. You're only sensing a rise because you're in those lower percentiles.
Many of my econ and finance proffs in college used to say that the Fed Chief had a lot more power over the economy than any President. They didnt tell us that the Fed also ran the White House
It's amazing how they always forget details like that.
Most people and almost all politicians cannot comprehend macro economics and are very quick to criticize the Feds operations.
You do not, however, hear it from economists very often. What does that tell you?
One big macro is that you can not continue to spend money you don't have. With the amount of spending and debt outstanding on credit cards, how can demand for goods pick up?
The problem is that all the jobs have been sent to China. The best fix that the government can come up with is to try and make us spend more money we don't have! So the bigger problem is that we have morons running our government. What about bringing jobs back to America?
Just what government jobs in China can they bring back and how many would that be?? The government has no power to require companies in the private sector to move jobs anywhere.
Do you really think we care ?
Why isn't Lohan in prison for about 6 years ?
One can argue on and on about the merits of central banking, the gold standard, etc. The critical issue is steering the United States economy through the current crisis. Mr. Bernanke has done a good job of playing what cards he has. Inflation should not become a particular problem. Mr. Volcker has proved that the central bank has the tools to quench inflation.
Croaker - as much as I am not a country western fan, the song goes; "Know when to hold them, know when to fold them." If he had any cards he played them poorly.
There is truth in those words, its unfortunate that too many still believe that throwing good money after bad will make things better.
Tax more, spend more "as long as I don't pay" seems to be the mantra of the losers.
The cards he had?
The cards he had were given to him by his friends.
Don't you ever do any type of research?
These people he's in cahoots with are companies he worked for and his buddies.
Stop whitewashing this Azznic
Well said Croaker. I agree.
Croaker - I agree with sharky, thanks for the comment.
Mr. Volcker did prove that the Fed has these tools, but if rates were to rise to similar levels today, the Government would default. Dr. Bernanke has been completely wrong about everything.
Have you bought gas or food latley????? We have hyper inflation
The Bernanke is a big turd and he needs to be flushed.
FCUK that evil piece of S%#T.
He literally stole your money and gave it to the same people who caused the crisis.
You on the other hand now have no job, no home and even more debt.
I would not prosecute any of his critics or enemies.
A jury of his peers in court consists of Hitler, Charles Manson, Lucifer himself, and Jeffrey Dahmer to name a few.
IF, as Bernanke says, it isn't about banksters getting their salaries, he must think keeping interest rates low will enable people with no jobs and no money to go on a buying and spending spree to stimulate the economy. I think there is something wrong with that logic. Low rates have cost savers and fixed income investors billions over the past 3 years and makes them tighten their wallets even tighter. Money that could have been spent on home repair projects, new cars, flat screen TVs, and a few meals at restaurants. That seems more likely to get our ill fated service economy going again. In the long run, we need manufacturing jobs for the people who don't have Masters Degrees.
Lets get Barnard Maddof out of jail and give him Crooked Ben,s job. Barnard like Robin Hood only sold from the rich. Ben and his band of crooked bankers and political hack only steal from the Americans dwindling middle class. May-bee we could also put Barnard at the head of the IRS so we could tax Ben.s elite buddies .They would all look good showering and bonding with their new friends in cell block QQQQQQOOO666P
Lets get Barnard Maddof out of jail and give him Crooked Ben,s job. Barnard like Robin Hood only sold from the rich. Ben and his band of crooked bankers and political hack only steal from the Americans dwindling middle class. May-bee we could also put Barnard at the head of the IRS so we could tax Ben.s elite buddies .They would all look good showering and bonding with their new friends in cell block QQQQQQOOO666P
End the F>E>D> and this fool running it. Almost as bad as Greenspan but at least one can understand Bernanke, when he speaks. The F>E>D> has been stealing the money since 1913.
Hey moderator.....
Drop the Captcha and spam crap.
I couldn't post unless I logged in and my email verifies you nitwit!
Captcha is the worst and most irritating thing on the web.
Most likely invented by the Germans who have no idea to make user friendly computer programs.
it is our own fault, nobody paid attention , these buffoon's in Washington have spent a decade stealing from the public coffers to enhance their own wealth and as always those who pay the bills got stuck with the bill, the best thing that could go to Washington is a new broom for a clean sweep