Bernanke is readying his first visit back to congress since our elected representatives afforded him another four years (at the expense of future generations). Ben begins two days of his annual Humphrey-Hawkins testimony on monetary policy before the House Financial Services Committee. He is scheduled to give his latest view on the economy.
The "green shoots" of economic revival are already evident, Bernanke told CBS program "60 Minutes" during a March 15, 2009 interview. "And I think as those green shoots begin to appear in different markets, and as some confidence begins to come back, that will begin the positive dynamic that brings our economy back," he said.
The unemployment rate was 8.5% in March 2009 and currently sits at 9.7% (courtesy of the government’s seasonal adjustment magic). The consumer confidence figure was 26 in March of 2009 and today, the reading for January 2010 came in at 46. The reading in March 2009 for “jobs hard to get” registered at 48.7% while the January 2010 read was 47.7%. “Green shoots” will likely not be roll off his lips as many of the green shoots have withered.
Grandpa expects some variation of the following:
Today, financial conditions are considerably better than they were then, but significant economic challenges remain. The flow of credit remains constrained, economic activity weak, and unemployment much too high. Future setbacks are possible. Nevertheless, I think it is fair to say that policymakers’ forceful actions in late 2008, and others that followed, were instrumental in bringing our financial system and our economy back from the brink. The stabilization of financial markets and the gradual restoration of confidence are in turn helping to provide a necessary foundation for economic recovery. We are seeing early evidence of that recovery….continued modest growth”.
Yes, this will be another circus comprised of two wasted days as each representative makes irrelevant and self serving opening statements and when they finally get around to asking a question; Barney Frank gives them the hook.
Most of the House Financial Services Committee could not reconcile their personal checkbook let alone comprehend entry level economics so once again, Bernanke will bamboozle them with his assurances that he and his crack team have a PhD proven monetary policy exit strategy; as he will personally turn off the money spewing faucet at the precise and strategic moment.
The committee will also breathe a sigh of relief when Ben tells them that he will keep interest rates low for the foreseeable future. Even though the Federal Reserve is an “independent entity within the government”, Ben knows the Democrats do not need any more challenges with their mid-term elections.
Barney Frank and Paul Kanjorski will once again use up more fresh air than they are entitled however look for a potentially “lively” spar with Ben courtesy of Alan Grayson (FL), Jeb Hensarling (TX) and of course Ron Paul (TX).
Michele Bachman (MN) is a member of the committee and she could be worth the price of admission. Identifying Michele is relatively easy; simply look for the woman struggling to pull a foot out of her mouth before her turn to ask questions.
Enjoy the show and keep your expectations really low.
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