Ben Bernanke’s economic forecast indicates a dire future for the currently unemployed and also for young Americans who’ll be graduating from school this spring and next:
In recent weeks, there have been a series of positive readings on the economy, including news that job growth was its strongest in three years in March and a report Wednesday that March retail sales rose a strong 1.6 percent. But in describing his view of the economic outlook to the Joint Economic Committee, Bernanke sounded the same restrained tone in describing his expectations that he did in testimony back in the winter.
“On balance, the incoming data suggest that growth in private final demand will be sufficient to promote a moderate economic recovery in coming quarters,” Bernanke said in prepared testimony. He added later that, “if the pace of recovery is moderate, as I expect, a significant amount of time will be required to restore the 8 1/2 million jobs that were lost during the past two years.”
That sounds right to me. And if Congress asked me to give my forecast, that’s what I would give. But if Congress asked me to serve as chairman of the Federal Reserve and give my forecast, I’d be saying that I’m going to be implementing what I can of Joe Gagnon’s plan for global economic recovery and urging my colleagues at the world’s other central banks to be doing the same. I’d be saying that thanks to these actions, growth is going to continue to pick up and we’ll have unemployment back to an acceptable level as soon as possible. Because policymakers aren’t just supposed to offer grim forecasts, they’re supposed to take action to improve things.
The complacency around these issues continues to be staggering, and I can only include that the sociological concentration of unemployment among non-whites, young people, and those without college degrees is responsible. My guess is that few members of congress, or top FOMC members, or newspaper editors, spend a great deal of time socializing with members of the hardest-hit demographic groups which makes it a lot psychologically easier to keep glossing over the fact that they’re planning to do nothing about a problem that they recognize is severe.