by Mark Silva
This just in from Jackson Hole:
Federal Reserve Chairman Ben Bernanke declared today that the nation's economy stands on the verge of a long-awaited recovery from a brutal recession, the worst financial crisis since the Great Depression.
Economic activity in both the United States and globally appears to be "leveling out," Bernanke said today in an address to the annual Federal Reserve conference in Wyoming. "The prospects for a return to growth in the near term appear good.''
Nevertheless, lingering credit problems and consumer confidence -- with trouble in businesses and households alike -- remain a concern, the Fed chairman said, noting that restoring a free flow of credit is critical to a lasting recovery.
"Although we have avoided the worst, difficult challenges still lie ahead," Bernanke told the conference. "We must work together to build on the gains already made to secure a sustained economic recovery."
The chairman devoted much of his speech to a recitation of the past year's events, including a near shut-down of credit last fall that led to a government takeover of major financial institutions and the failure of banks and investment houses.
Of course, Bernanke and then-Treasury Secretary Henry Paulson were instrumental in convincing both President George W. Bush and congressional leaders last fall that an extraordinary federal intervention was necessary - with $700 billion in financial market bailout authority handed to the Treasury Department - so Bernanke has a vested interested in any success-rating for the government's actions.
Robert Gibbs, the White House press secretary, said today: "Not wanting to read too much into one day's statistics, if you look at the course of several months, it does appear that the housing market is starting to bottom out... The economy that the president inherited on taking office was at the brink..... (and actions taken by the administration and Congress) "have pulled the economy back from that brink.''
(Photo of Ben Bernanke, Federal Reserve chairman, at the Jackson Hole Economic Symposium at the Jackson Lake Lodge in Moran, Wyoming, today, by Daniel Acker / Bloomberg News)
"Without these speedy and forceful actions, last October's panic would likely have continued to intensify, more major firms would have failed and the entire global financial system would have been at serious risk," Bernanke said today, without acknowledging any missteps - such as the bonuses allowed for executives of the firms involved in bailouts such as the $180-billion American International Group rescue.
Unlike the 1930s, says Bernanke, a scholar of the Great Depression, Washington policymakers this time acted aggressively.
"As severe as the economic impact has been, however, the outcome could have been decidedly worse," he said. The crisis "sparked a deep global recession, from which we are only now beginning to emerge.
"Looking forward,'' Bernanke said, supporting an overhaul of federal regulation, "we must urgently address structural weaknesses in the financial system, in particular in the regulatory framework, to ensure that the enormous costs of the past two years will not be borne again.''
Wire services contributed.
Comments
The Bush recession is almost over. Thank you Pres Obama and Dem leaders!
Like the proverbial toddlers deprived of a cookie, the Wingnutty teabaggers have been stomping their feet and whining - why isn't everything better RIGHT NOW?!?! Just six months into an Obama presidency that inherited from the BushCo Republicans the worst economic conditions since the Great Depression and damn it, that watered down stimulus bill--(that HAD to include tax cuts demanded by the GOP that does little to nothing to stimulate)--didn't give us immediate gratification and relief? Amazing!
Never mind that Obama had to deal with Repug governors refusing stimulus money to score cheap political points with their toothless redneck base and that some states are using the stimulus money to shore up budget shortfalls. Never mind that economists said it would take 12-18 months to see results (we're already seeing results) - the Wingnut Teabagger Thugs wanted their results NOW!
Posted by: Aneurysm | August 21, 2009 12:21 PM
My favorite part of the economy starting to recover from the Bush recession is that Wingnuts have been on here for the entire six months of Obama's presidency trying to blame the entire Bush recession on him.....and now?.....Ha Ha Ha!
I GUARANTEE you that whackjob Wingnut sycophants (like Terry and John D) will start up with their new BS talking point of: "the economy recovered on it's own, snort snort slurp slurp blah blah!", and it will happen in:
5...4...3...2...1 Ding Ding Ding!
Posted by: former Republican | August 21, 2009 12:30 PM
GOOD NEWS!!!!
Now, can we have the rest of the 678 Billion back?
Paulo
Posted by: Paulo | August 21, 2009 12:37 PM
I know correlation is not causation, but correlation is at least intriguing. As Obama's approval ratings and support for healthcare reform continue to nose-dive, the DOW improves.
The rapid loss of support for health-care reform and loss of confidence in Obama’s economic mastery may have indicated to Wall Street that Obama had reached the functional limit of his power. America has spoken loudly that they do not want radical change, and that may have emboldened some investors to get in early and ahead of the curve.
Posted by: Chris | August 21, 2009 3:09 PM
BUT....
Exactly what economic recovery is Bernanke talking about???
Unemployment = high, and growing
National Debt = astronomical
Mortgage defaults = growing
Jobs being created = where?
Jobs being saved = what does this even mean???
Where is the recovery exactly?
Posted by: Chris | August 21, 2009 3:57 PM
Paulo,
No you cannot have 678 billion back....Because the 787 billion dollar subsidy consisted of 499 billion in spending and 288 billion in TAX CUTS. Sheesh!
Posted by: janet | August 21, 2009 4:47 PM
Bernanke dearly wants to be reappointed.
So someday some sycophant at the Washington Post can write a book about him entitled
MAESTRO II.
Given his failures to regulate during the Bush era, there are serious questions about whether he should be reappointed.
Pat Fitzgerald would probably be better suited to the current issues.
So much crime, so little prosecution.
And as to recovery, it'll be like recovery from 2 broken legs.
Slooooooowwww. And jobless.
Posted by: ornery | August 21, 2009 5:01 PM
Bernanke had the gall to threaten Congress and the American people with economic destruction. Get this arrogance out of the Fed, … just for a start.
The Kings of Wall Street have long coveted the absolute supremacy they now enjoy over the largest economy in the world. The debt is a problem, but vast change is necessary throughout the banking system. A radical change is needed on Wall Street.
It starts with the taxpayer's attitude adjustment.
http://pacificgatepost.com/2009/08/america-end-your-fear-of-wall-street.html
- - - Quit fearing Wall Street.
Posted by: James Raider | August 21, 2009 5:35 PM
I wonder if old Ben had heard this news
http://www.reuters.com/article/newsOne/idUSTRE57K4XE20090821
Former,
Since 1933, the longest recession since has been 16 months, until now. Yes, this recession should be over very soon on its own. It will take BO policies to screw this up, and he is probably doing a good job of it.
Posted by: Terry | August 21, 2009 7:11 PM
OK, I'll take on aneuryism (who seems to be having one) and "former Republican" (whom I believe is lying about that) and bring some rationality to this debate. The "not so much" stimulus bill did not stimulate. It was essentially Pelosi payoffs to favored consituencies. In fact, as business sheds 6.9 million jobs, government creates 110,00 jobs. How could that be when tax revenues are going down? It is funny money.
Second, we cannot continue to print money to support $2 trillion deficits. As it is now, many of our banks are actually bankrupt, but with the complicity of the Fed, FDIC, and others in the government, they are being allowed to "mark to fantasy" rather than "mark to market". If they were forced to "mark to market", the FDIC, which is already out of money after the Colonial seizure last Friday (costing the FDIC $2.4 billion) would have to run to Congress for more funding. The results of this reluctance to seize banks is that when they are finally forced to seize a bank, the cost to the FDIC is substantially higher that it would have been if they had seized it earlier. Why? Because the stated assets are losing even more value the longer the FDIC waits. The hope of Bernacke and Bair is that the whole problem will go away if they just wait long enough. It won't.
Forget the little up tick in housing. It is the end of summer. Wait and see what happens in September and October. Oh, and the first time home buyer credit expires in November.
Forget the decline in the unemployment rate last month. The rate ticked down by .1% because .2% dropped out of the labor market and are no longer being counted. The true rate for the U3 number is 9.6 or 9.7. Florida has a 10.7% unemployment rate. That is third to California which has a rate of 11.9.
Personal income is still dropping. The consumer (70% of the economy) is trying to reduce debt, not increase it. Even if he wanted to increase it, loans are hard to get. Not only that, the interest rates on credit cards are sky rocketing. That is even more money that is not available for consumption. Business investment is still way down as is capacity utilization.
We have a long way to muddle through before this economy really improves.
Rick
Posted by: Rick Caird | August 21, 2009 7:33 PM
dirty rotten so and so's I cant stand when a government keeps lying to you.
I visit http://www.forecastfortomorrow.com/news regularly and he has been spot of for ages now...they have set us up
bernanke two step continues.....these greedy bankers have what is coming
Posted by: kelly q | August 22, 2009 10:59 PM