Ben Bernanke gave a very lengthy answer to the question “why has the recovery from the crisis been so slow and erratic?,” but Bernanke danced around the obvious:
Why has the recovery from the crisis been so slow and erratic? Historically, recessions have typically sowed the seeds of their own recoveries as reduced spending on investment, housing, and consumer durables generates pent-up demand. As the business cycle bottoms out and confidence returns, this pent-up demand, often augmented by the effects of stimulative monetary and fiscal policies, is met through increased production and hiring. Increased production in turn boosts business revenues and household incomes and provides further impetus to business and household spending. Improving income prospects and balance sheets also make households and businesses more creditworthy, and financial institutions become more willing to lend. Normally, these developments create a virtuous circle of rising incomes and profits, more supportive financial and credit conditions, and lower uncertainty, allowing the process of recovery to develop momentum.
Yes, normally a recession is self-correcting, but not this recession. Hmmm … I wonder why?
Bernanke never gets there, simply repeating that the recession was severe and worldwide, and there was a Tsunami “Japanese disaster,” blah blah blah.
Has there never been a worldwide recession, a “disaster” in a major global economic player, or all of the other minutiae mentioned in the 3,500 word statement?
So why of all the recessions, some of which have been very deep, why is this one not self-correcting? Like I said, he never gets there.
Words, just words. Over 3,500 in total. But two were missing. The two which hold the answer to the question.
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Comments
Does one start with “B” and the other with “O” ?
Keynsian economics.
You’re being unfair to Bernanke by implying that what followed the quoted paragraph in his statement were an Obama-like litany of excuses (tsunami, etc.).
What he actually says is unquestionably true — that this recession is unusual in that it was triggered by a housing related financial meltdown and continues to be driven by the ever-deeper fall of housing prices and frozen housing markets. He adds that investor risk aversion related to the European sovereign debt issues, the S&P downgrade and market concern about US deficits is a problem.
The failure of Obama and company is that they took little notice of the unusual aspects of the challenge they faced in 2009, foolishly assumed that the economy would correct itself, as it had in previous recessions, and therefore charged ahead with Obamacare and other pet Dem schemes. Now, they have backed themselves into an economic and political corner.
I have begun to think that the ongoing recession is more like the firsf great depression that struck the industrializing economies beginning in 1873 — set off by an explosive financial panic that ensued when the feeverishly inflated bubble of stocks in new industries burst. It will take some serious doing to confront this challenge.
B-a-r-a-c-k O-b-a-m-a…. or… e-p-i-c f-a-i-l?
Obama’s policies? President’s failure? Or, perhaps: Bush’s fault?
Of course, I believe Keynesian Economics, Barack Obama, and epic FAIL are all correct. 😉
Tax Cuts.
Democrap Congress or President Obama.
“I resign!”
Government interference
I think Perry was on the wrong track with Bernanke. Since he, Bernanke, perjured himself to Congress regarding QE1 and QE2, shouldn’t he be impeached? Where is a Congress with some guts!?
We’re broke
OK, I’ll bite: “in bed”?
How about Obama Care? All right, I had to split that usually compound word. Look at the graph of private sector job growth before and after the passage of Obama Care:
http://blog.heritage.org/wp-content/uploads/Obamacare.gif
Jobs growth ground to a near halt.
One word: Democrats
If I added the two words, it would be “Barack Obama”.
If Joe Biden added the two words, it would be “We’re all idiots”.
Keynesian economics was close.
What we are really suffering from is a Keynesian Depression.
We saw one in the 30’s and Japan has muddled through their own for 20 years.
Two words: Capital strike.
“Capital strike.”
From the perspective of popular culture “Capital strike” leaves the impression that capitalism is to blame.