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Fed Can’t See Why Obama-nomics Is Failing

From an equally stumped Associated Press:

Economic trouble puzzles Fed chief, too

By Paul Wiseman And Martin Crutsinger, AP Economics Writers – Wed Jun 22, 2011

WASHINGTON – The economy’s continuing struggles aren’t just confounding ordinary Americans. They’ve also stumped the head of the Federal Reserve.

Fed Chairman Ben Bernanke told reporters Wednesday that the central bank had been caught off guard by recent signs of deterioration in the economy. And he said the troubles could continue into next year.

Somehow the Obama administration seems to be constantly caught off guard.

"We don’t have a precise read on why this slower pace of growth is persisting," Bernanke said. He said the weak housing market and problems in the banking system might be "more persistent than we thought."

It was the Fed chief’s most explicit warning yet that the economy will face serious challenges next year. For several months, he had said the factors working against economic growth appeared to be "transitory."

The Fed cut its forecast for economic growth this year to a range of 2.7 percent to 2.9 percent from an April forecast of 3.1 percent to 3.3 percent. It also cut its forecast for next year to a range of 3.3 percent to 3.7 percent from an earlier 3.5 percent to 4.2 percent. The Fed also said unemployment would stay higher than it had expected earlier.

So now temporary (or "transitory") means through the end of 2012. In that sense, Mr. Obama might also just be temporary.

In a policy statement issued at the end of a two-day meeting, the Fed blamed the worsening economic outlook in part on higher energy prices and the earthquake and tsunami in Japan, which slowed production of cars and other products.

Which was laughable in itself. When in the history of the world has any economy been free of earthquakes or any other unforeseen problems?

But at a press conference afterward, the second of what the Fed says will be regular question-and-answer sessions with reporters, Bernanke conceded the economy’s troubles are more puzzling and potentially more long-lasting than a pair of temporary shocks

See Mr. Bernanke’s remarks below.

The Fed’s statement Wednesday stood in contrast to the Fed’s more upbeat view when officials last met, eight weeks ago. At that time, the central bank said the job market was gradually improving…

And that was an absurdly rosy view, even back then.

The bad economic news is taking a political toll on President Barack Obama. For the first time this year, an Associated Press-GfK poll found that fewer than 50 percent of respondents believe Obama deserves re-election. Obama’s overall approval rating fell to 52 percent in the new poll. It had risen as high as 60 percent after the U.S. raid last month in Pakistan that killed Osama bin Laden

Which, after all, is the real heartbreak here. To borrow from ‘Uncle Joe’ Stalin, ‘millions of jobs lost is a statistic. But if Mr. Obama loses his job – that would be a tragedy.’

As the article notes, in yesterday’s press conference a reporter asked Mr. Bernanke how the growth-rate cuts for 2012 jibed with the Fed’s official post-meeting statement Wednesday.

Here is Mr. Bernanke’s response:

What we say is that the temporary factors are in part the reason for the slowdown. In other words, part of the slowdown is temporary, and part of it may be longer-lasting.

You see, the slowdown is both temporary and longer-lasting. What could be more clear?

We do believe that growth is going to pick up going into 2012 but at a somewhat slower pace than what we had anticipated in April. We don’t have a precise read on why this slower pace of growth is persisting.

One way to think about it is that maybe some of the head winds that have been concerning us, like, you know, weakness in the financial sector, problems in the housing sector, balance sheets and deleveraging issues, some of these head winds may be stronger or more persistent than we thought.

Mr. Bernanke has been blaming "headwinds" since at least November of 2009. But it does sound a little less preposterous than blaming all our misfortunes on an earthquake halfway around the world.

But, once again, what Mr. Bernanke calls "headwinds" is what most people mean by the economy. It is that darned bad economy that is holding the economy back.

This article was posted by Steve on Thursday, June 23rd, 2011. Comments are currently closed.

22 Responses to “Fed Can’t See Why Obama-nomics Is Failing”

  1. Liberals Demise says:

    Barack can’t be bothered by the economy now. He is in full campaign mode.
    Busy squeezing “HIS PEOPLE” for contributions and making sure they stay on democrack.

  2. proreason says:

    I understand it.

    If the mafia is threatening to break your legs if you don’t fork over 20% of your restaurant’s proceeds, a lot of people will choose to take that job with Home Depot and close the restaurant.

    That’s the story of the American economy in a nutshell.

  3. Chinnubie says:

    Talk about history repeating itself from 1980. 30 years later and we are in the very same position we were in back then and never would this idiot administration try another approach to the problems we are having. This leads me to believe this is being done on purpose and the people in the White House are “HIGH FIVING” each other at this latest economic news. My guess, they couldn’t be happier at the destruction they continue to reign down on this great country. Amazing is the abuse we can put up with and the ability to continue on. Hopefully, the 2012 election will give us our reprieve and we can then work to getting back on track.

  4. untrainable says:

    In normal society if you walk in and tell your boss that you don’t understand how to do your job… you get fired. In our government, the more vast your ineptitude the higher your paygrade. Thanks for the change Barry.

  5. BannedbytheTaliban says:

    A case study in circular thinking.

  6. Petronius says:

    Bernanke’s comments have sent world markets into a nosedive.

    The DJIA has lost 300 points (about 2% of its value) since close of his remarks yesterday afternoon.

    Stocks, oil, and other commodities are falling across the board. Even the metals are taking a hit.

  7. Rusty Shackleford says:

    The cartoon is:

    Hambone is telling his minions to shovel more cash into the burner to keep the head of steam up in the Obama Campaign Boiler. The stockpiles of cash that are being shoveled into the flames are labeled QE1 and QE2.

    Just heard that Hambone is releasing strategic oil reserves “in order to ease the shortfalls caused by Libya”. Um, the US gets a minuscule amount of oil from Libya. Microscopic. And it goes through BP. This is a lame “reason” and a pathetic attempt at manipulation for political reasons. In other words, it’s an obvious attempt by Hambone to lower oil prices to get votes.

    Every—-single——time. He shows us what a playground child he is.

    • Petronius says:

      Why drill when you can drain the country’s strategic oil reserve?

    • untrainable says:

      And the amount of oil that he is “releasing” will last the US almost a day an a half. Woo Hoo!
      He is also showing just how stupid he thinks WE are.

  8. tranquil.night says:

    I don’t know what else to say.

    We not only predicted this failure, we tried to warn Republicans that once again the regime was going to blame any new economic malaise or harsh downturn on them. We warned them from the first bailouts, GM rulings, and Stimulus – where we knew nothing was funadmentally addressed to fix the problems that lead to that point, but instead would make it all exponentially worse over time. We warned them following the 2010 election, when activists knew that a part of Obama would love having a opposition majority to use as a punching bag for 2012. We warned them on the 2 year tax extension deal. We screamed and yelled that they had to hold firm on the prospect of a government shutdown over the 2011 budget because there’s never going to be any sustainable economic growth again without significant reforms. We knew this because we understood Obamanomics. We understood why the Liberals were pursuing Obamanomics – and in that respect they aren’t failing, they’re succeeding.

    And now with markets tanking and the Fed having backed us into a corner where we either print more money or raise interest rates and suck the remaining fluids out of this illusion of a ‘recovery,’ the Democrats have positioned themselves to blame Republicans for the crisis because they aren’t raising the debt ceiling. And they are going to succeed with that narrative too – just like a plurality to near majority still think Bush and Republican policy were responsible for the Subprime meltdown – unless the leadership finally understand that the Liberals are on an aggressive by any means necessary mission to hold onto their power and agenda, which isn’t about progress as we define it.

    They have been warned and warned. They continue to ignore the obvious at their own political peril, and unfortunately to the peril of everyone in this country.

    • tranquil.night says:

      Alright, almost a month ago I offered some input to Erick Erickson’s report about the House RSC’s idea to combine the House and Senate debt ceiling demands into one crisp plan called Cut, Cap, and Balance. My point was that the ambitious objectives needed broad support, and to get the plan into the mainstream ASAP so we can rally to it. http://sweetness-light.com/archive/selected-news-items-for-may-28-jun#comment-201234

      Here’s the official website for the Pledge now: http://cutcapbalancepledge.com/

      Good news is that since then it’s made the inside-the-beltway rounds and has gained lots of momentum in the grassroots media, especially after our stalwart Jim DeMint went as far as to say he won’t endorse any presidential nominee that doesn’t fight for this plan. He joined the rest of our Roughrider Cavalry in the Senate in taking the pledge to fight for all the provisions.

      The BBA is the biggest uphill battle, but it’s great to see the big guns ready for the charge, because after watching the establishment go soft on the FY11 then Ryan Budgets, it was beginning to look like the united support in the Senate for the BBA was going to be another unnecessary casualty. Keep fighting guys.

      If I can get historical for a sec, I call DeMint, Rubio, Rand Paul, and Mike Lee our cavalry for their heightened status as upper statesman, and call them Roughriders because like the original who rose up at a time when foreign interests (Spanish at thattime) were encroaching in the region but America’s professional fighting forces were weak, so too is the Tea Party Senate caucus facing off not just against liberals, but Liberal Republican good-ol-boy network. And although there were cavalry in the original unit, usually they fought on the ground with the volunteers, much like how our Senators are standing shiled to shield with the Tea Party on the ground. This Cut, Cap, and Balance fight will be a lot like the battle of San Juan Hill in the war for Cuban Independence, where the Roughriders were grossly at disadvantage in terms of terrain and infantry number/power, but the hill was taken by a combination of a ‘gutsy call’ Picket-style charge by one charismatic Colonel named Roosevelt and a very effective artillery team.

      Well, we don’t have the charismatic future Grandfather of Progressivism, but we do have a charismatic team including a Senator of Cuban descent. And we do own the airwaves; so get out into the media and keep calling in that artillery, Roughriders, and we can take this hill.

  9. Liberals Demise says:

    Please watch this video in which Paul Ryan schools Ohomo and BiteMe.

    Watch dingleBarrys face……….priceless!!

    • Rusty Shackleford says:

      Paul Ryan is one of those guys who does his homework. Obviously, he’s not a product of affirmative action and thus, Hambone ignores him. I can see in Hambone’s face that 1) he hates the guy and 2) he’s off in his own world wondering how he can avoid that sand-trap on the 7th next time out on the links.

      Paul Ryan was making a gross error by even thinking that the president and his drooling mouth-breather vice would even listen. Sure, they do a good act of looking like they’re listening but they aren’t. Later, after this meeting, I’m sure it’s not too far of a stretch to imagine who came up with the best “Paul Ryan” smart-ass comment. Either some mimicry or something about his mother, etc.

      Paul was trying to have an adult conversation with sophomores. That is a fool’s errand. Hambone and the rest of the whole hee-haw gang all play the same one-string banjo. Tax/spend is the only song they know and the way they solve problems is by blaming republicans. And republicans let them. For 60 years, the republicans have been playing defense. That’s no way to get a nation to succeed. There was a brief respite in the 80’s with Reagan. We were growing and the nation was a proud nation.

      That doesn’t set well with self-loathers who, as tn has pointed out, have co-opted the democrat party to subvert our brilliant system into a haven for self-serving infantile solutions to imagined problems with worthless money.

    • tranquil.night says:

      Epic ownage. Thanks LD.

      Mr. Ryan is more than just a hero to the Tea Party but to all honest Conservative accountants and number geeks out there. It was beginning to look like the whole upper tier of both sides of the industry was phony, which only fuels that populist rage that helps Liberal class warfare.

  10. Not so fast says:

    The problem for Obama is that we are getting a massive glimpse of 2013 in 2011 before the Presidential elections. But everything is working according to Obama, Soros, Muslim Brotherhood plans except a little too fast! Make NO mistake everything that is going on now is PROFITING somebody some where in the world. Soros is just one of the more visible ones.

  11. proreason says:

    For thousands of years, the so-called purpose of government was to protect citizens from danger…usually brigands and other governments.

    What we now know is that the REAL purpose of governments is to enrich the governors at the expense of the people. It was always so, but the people were so ill informed that they didn’t know it.

  12. Reality Bytes says:

    E.G for B.B: Here at RB, Inc. business is way off but me worry? NO WAY. We’re taking a tip from Washington. That’s Right! We’re raising prices folks! Why it’s so simple. Don’t want to pay $29.95 for an RB widgie? No Problem! Since we raised our prices to $59.90, WE’LL DOUBLE OUR REVENUE JUST LIKE THAT!!!

    How great is that?

    Maybe I should run for Congress (cause I may be needing a job soon).

    • tranquil.night says:

      Run for Congress, then you can blow up and buy out your competitors. Keep your business, keep your high prices, and keep your congressional perks! Winning!

    • Reality Bytes says:

      The only difference between the Mafia & Congress is…..Congress can pass laws that kill you slowly. The Mafia takes a quicker less painful route. Nothing personal in both cases. Then again, at least The Mob is honest about it. Democrats kill you literally with their insipid care. We Care! We Really Do!

      Make you want to throw up…or march. Hopefully the latter.

  13. Reality Bytes says:

    “We’re the Democrat Party. Putting Your Money Where Our Mouth Is for Over 85 Years.”

    Bumper sticker of the month, “Don’t blame me! I voted for the American”

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