Thursday, May 7, 2009
Earlier this week, Fed Chairman Ben Bernanke appeared before Congress and, for a moment, smiled.
Yes, the man who’s job it is to interpret the vagaries and vicissitudes of all things financial in our country spoke to our elected political heroes on Capitol Hill, actually lacing his economic forecast with positives words.
Saying that the housing market has “hit bottom,” he was described as guardedly optimistic about the Recession being over by the end of this year and the road to economic recovery being less treacherous in 2010.
I can’t buy it.
Calling Chairman Bernanke a liar would be misguided and slanderous, but I am keenly aware of what his job is (and, more importantly, isn’t) all about. The Fed Chairman has the incredibly unenviable task of constantly walking a high wire. Part prognosticator, part huckster, wrapped up in a song-and-dance man as well as trying to remain a straight shooter, Bernanke must sound somewhat if not cautiously “optimistic” in the midst of this crisis. What other choice does he have; tell the blatant and naked truth?
No, that’s the media’s job.
He must carefully interpret the documents, data and disseminations that his office receives and carefully formulate, massage and parse words and phrases, redefining what the word “is” is so many times, that it would make the Clinton Administration pull their hair out.
Imagine the responsibility, the burdensome gravitas of one person who can make the stock market plummet like a lead balloon with one sharp, caustic sentence by being too “negative.” Or, conversely, artificially inflate a forecast only to be ridiculed and castigated by the President of the United States for being too “positive.”
Such is Ben Bernanke’s life; wedged right there between that economic rock and financial hard place.
It is a balancing act that has the fate of President Obama’s re-election, global economics and consumer confidence hanging on his every word. Former Fed Chairman Alan Greenspan was the master of speaking in front of Congress and saying absolutely nothing and making it sound as if we were fine. He was the master, not of spin, but of deception. In hindsight, some cable pundit should have barked in 2006 as the curtain was pulled back in the fray of a hot housing market, “Pay no attention to that man married to NBC’s Andrea Mitchell as our toxic mortgages balloon and our financial bubble ready to burst.”
Forgive me as I revert back to my Doubting Thomas ways; I remain utterly skeptical.
Remember, that back in October, former Treasury Secretary Hank Paulson called a late night meeting on Capitol Hill and said that we were “staring in the financial abyss,” only to have Ben Bernanke tell Congress that he thinks the Recession will be over by the end of this year.
When did that financial abyss turn into a fiduciary pothole?
It took a war to get us out of the Depression, almost four years of Reagan-o-mics to beat stagflation. Ben Bernanke is suggesting we could be out of this Recession in less than a year? No way.
All I know is that economic cycles are like what Tip O’Neill said about politics: “It’s all local.”
If you still own your house, have a job and money in your pocket, you may believe the Fed Chairman. If you’ve lost your house, or looking for work and/or can’t pay your off credit cards, you don’t believe a word out of Ben Bernanke’s mouth.
No matter how “optimistic” this Fed Chairman sounds.