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Did Bernanke See His Shadow?

Ben Bernanke may very well have seen his shadow. He is promoting policies that suggest long winter: with frozen job growth, and a deficit that is snowballing.

While many Americans celebrated Groundhog Day yesterday, lawmakers in Washington were participating in a more regular tradition: debating the state of the economy. Federal Reserve Chairman Ben Bernanke took the stand before the House Budget Committee to defend the central bank’s recent policy decisions, a performance that mirrored the pomp and circumstance of the activities in Punxsutawney.

Bernanke’s repetition of poor policy prescriptions was a fitting way to celebrate the national holiday. Once again, he insisted that interest rates will remain low without affecting inflation, and that government spending will increase job growth. In fact, Bernanke warned lawmakers ahead of the August debt deal that cutting spending too quickly would be catastrophic for the economy. In reality, the succeeding five months have been the only consistent decrease in the unemployment rate since the start of the Obama Administration. And yet, both the President and the Chairman ignore actual pro-growth policy. There are several common sense solutions that have yet to be implemented, despite the abysmal economic performance of the past three years.

While America’s favorite groundhog may have predicted six more weeks of winter, the nation’s (least?) favorite policymaker admitted the country would likely face many more years of poor job growth. The recent CBO report confirms this: unemployment is expected to stay above 8 percent (the number we were promised it would never crest with the passage of the “stimulus”) until 2017. The Obama Administration has many pro-growth policies at its fingertips. What will it take to get the President to act?

Posted by Alexander McArthy on Friday, February 3, 2012 11:31 AM EST



Printed from: http://www.atr.org/bernanke-see-his-shadow-a6717?print=true