Art Cashin of UBS looks at the Q&A portion following Fed Chairman Bernard Bernanke’s Cleveland speech last night.

Regardless of what you thought of the speech (Lessons from Emerging Market Economies on the Sources of Sustained Growth) it was the Q&A that produced the stir.

Via the Associated Press, here is a brief report on the event:

“Federal Reserve Chairman Ben Bernanke said Wednesday that long-term unemployment is an American “national crisis” and suggested that Congress should take further action to combat it. He also said lawmakers should provide more help to the battered housing industry. Bernanke noted that about 45 percent of the unemployed have been out of work for at least six months.

“This is unheard of,” he said in a question-and-answer session after a speech in Cleveland. “This has never happened in the post-war period in the United States. They are losing the skills they had, they are losing their connections, their attachment to the labor force.” He added: “The unemployment situation we have, the job situation, is really a national crisis.”

Bernanke said the government needs to provide support to help the long-term unemployed retrain for jobs and find work. And he suggested that Congress should take more responsibility.

Art notes that “there was even a line that might be seen as a cross between ‘I’ve done my job’ and ‘we’re plumb out of bullets’ “:

“Monetary policy can do a lot, but monetary policy is not a panacea,” Bernanke said.

>

Sources:
Bernanke: U.S. Unemployment a ‘National Crisis’
Joshua Zumbrun and Vivien Lou Chen
Bloomberg, Sep 29, 2011 12:00 AM ET
http://www.bloomberg.com/news/2011-09-29/bernanke-says-u-s-facing-national-crisis-as-high-unemployment-persists.html

Bernanke: Long-term unemployment a national crisis
MARTIN CRUTSINGER
AP Economics, September 28, 2011
http://www.kansascity.com/2011/09/28/3173244/bernanke-urges-us-to-learn-from.html

Yahoo Finance version

Category: Employment, Federal Reserve, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

29 Responses to “A Plaintive Plea From Mr. B?”

  1. chancypants says:

    We need to get those unemployed people back on the debt treadmill, stat! Do you know how much interest the banks are losing!!

    The Fed has an obligation to it’s shareholders, with policies in harmony with the government:
    F&#@ the Poor. It’s working.

  2. rktbrkr says:

    QE2 never budged the jobs situation and there was little likelihood it would, it takes a lot for BB to admit it’s a crisis, we have a great opportunity to completely replay the great depression with a dose of austerity nowimposed by a minority of political zealots. Meanwhile BAC looks like Dead Bank Walking after years of can kicking.

    Saw a TV piece about long term unemployed in Chigo, showed a middle aged U Chigo MBA who was loading boxes for UPS, he shrugged his shoulders.

    Job training in US has always lagged europe esp German appretice programs, we need to gear up big time or just wait for the dollar collapse to make us the new Bengla Desh

  3. eliz says:

    I’d like to see Congress enact legislation that would require companies to create in-house training programs before becoming eligible for obtaining H1B visas. In the ol’ days, big companies trained people (screened to verify they had the aptitudes) to become programmers/developers. It is not a far-fetched idea.

  4. wally says:

    Bernanke was very clear on this in his Minneapolis speech, too… but people just don’t seem to listen. You still hear all kinds of BS about what the fed is ‘trying’ to do or has ‘failed’ to do.

    The onus is on Congress, pure and simple. The Fed has no tools, in this situation, that can make up for the abject failure of Congress to give a shit about the people who live and work – or not – in this country.

  5. louis says:

    Wow, he finally looked behind him and saw all the wounded still on the battlefield. What will they do?

  6. davossherman@gmail.com says:

    Ben S Bernanke is the biggest economic moron that ever walked the face of the earth.

    Read the FY2005 FOMC meeting minute transcripts where they laughed about the impending housing bubble, off shoring good paying jobs and exploiting cheap labor, laughed about Greenspan’s really good times and how they knew they’d wind up creating really bad times, laughed about which politicians liked to borrow more, and discussed dollar depreciation’s of 8%-10%.

    http://www.financialsense.com/contributors/d-sherman-okst/tossing-the-consumer-under-the-bus

    We have 22% actual unemployment. That is a RECESSIONARY number.

    The Fed created this unmitigated disaster.

  7. davossherman@gmail.com says:

    Shit, Correction to the above, that is a DEPRESSIONARY number, I effing hate spell check.

  8. atandon says:

    I have a very focused and unconfused opinion that lawmakers can really change this situation. Yes they really can.
    Businesses are outsourcing jobs to low cost regions. Therefore, lawmakers should pass a law as follows …

    1) Businesses in US need to project, for the next quarter, the jobs they need to outsource due to cost saving needs.
    2) Make an employment exchange in US (under ministry of human resources) that posts the rate at which businesses are proposing to outsource.
    3) People who want to take the jobs at the competing rates can register with the exchange and it will be mandatory, by law, that people who are willing to accept the job at competing rates will be given the job on priority. This coupled with unemployment benefits (reduced to an extent for people accepting lower rates) can keep employed.

    It isn’t really that difficult or so I think. Any opinions on this?

  9. theexpertisin says:

    I’ll gladly pay the tax rates of 1986 if the regulatory and add-ons to SS and Med were rolled back an equal number of years.

    You can’t have one without the other.

  10. Moss says:

    The Congress has long ago abdicated responsibility for doing their job to the monetary trigger fingers of the Fed. This has been the case… since the days of Nixon.

  11. ephinz says:

    Fixing unemployment via government created work – outside of those legal and compliance positions created by more regualtions – seems highly unlikely. As a society, we do not value those skills needed to succeed.

  12. pintelho says:

    I believe Operation Twist to be QE3. If you think about it, QE2 was a $600 billion effort to introduce liquidity into the system. Twist is $400 billion…Besides marketing and branding…I don’t know why its not viewed as QE3.

  13. [...] Bernanke’s Speech did not rule out further Fed action — despite his plea its up to Congress, the political pressure against him, and the ongoing attenuation of Fed [...]

  14. b_thunder says:

    The Bernank really said that? I mean, it took him only… 2008, 2009, 2010 , most of 2011 – 3.5 years to figure out that this crisis is _different_ ??? And if the monetary policy isn’t a panacea – why has he been took the monetary policy to such extreme as perpetual 0% rates, $2 trillion in money printing, etc?

    Perhaps in the near future he will wise up and admit that instead of helping he hurt the employment picture, instead of saving the fin. system he saved fin. institutions (and lined up bankers’ pockets with 7- and 8-figure bonuses), that ultimately he inflated another bubble!

  15. eliz says:

    How about requiring any company that does business in the U.S. to follow U.S. employment and business laws & regs for ALL their employees & contractors (wherever located) and all their places of operation. If that is not satisfactory, good riddance. Leave us to build & rebuild among ourselves. * And for the record, I think Big Business stinks to high heaven.

  16. VennData says:

    Fed Chairman wants Obama’s job’s bill passed. The GOP’s un-economic politicization of the Fed leaves the Chairman with a do-or-die attitude. Any GOP President would not renominate him, Obama definitely would.

    The GOP voter has been so infused with hatred, and nonsensical Tea Party rhetoric that Romney can’t separate himself form the pack, not only due to Romneycare, but a general belief that he’s not a troglodyte. Romney – if elected – may nominate some nut job to the Supreme Court like both Bushes, but he wouldn’t give the pitchfork-wielding GOP voters abortion, flag burning, the end of Social Security, closed borders, prayer in the bathhouses etc… etc…

    The economy can’t find jobs for the 85% of long-term un-employeed who have no HS diploma and related maladaptive behaviors, but that will not result in a economic crisis. The best thing Obama could do is maneuver the GOP into making re-extension of unemployment benefits impossible (THINK… “ending unemployment benefits as we know it” sic…) The globally-linked US economy will grow, albeit slowly, for a long time,

    Start preparing now for Obama’s second term (and more Bernanke)

  17. davossherman@gmail.com says:

    b_thunder: You nailed it. My cat’s name is Mr. B and he has more economic sense than Moron Bernanke et al.

  18. andrewp111 says:

    The Bernank has only one bullet left, he can’t use it by himself, and it is not guaranteed to work either. The whole idea of reducing the 30 year rate and buying mortgages is to enable Obama’s mass-refinance plan. It has been rumored for months that Obama will issue an executive order requiring Fannie and Freddie to refinance every residential mortgage in the US, regardless of LTV, at rates of 2% or lower. The refinance could also be made compulsory for all current borrowers with gov’t loans by calling those loans – a true “offer you cannot refuse”. Expect Obama to do something once the appropriations cycle is over with for FY12. Refinancing $10 Trillion in mortgages will pump hundreds of billions per year back into the pockets of voters. In theory, this would boost consumer spending and bring back job growth. However, it would reduce the level of interest income in the economy by the same amount, and could push banks and pension funds to the wall. And that is why it is not guaranteed to work.

  19. rktbrkr says:

    After the debt ceiling chaos in congress we looked to the Fed for salvation now BSB is saying it’s Congress’ pwobwem.

    The fed has tried and failed 2+ times, ditto congress with repeat stimulus programs, we need a modern day WPA but we won’t get that until the Teabag wackos throw us into an austerity driven big “D” depression

  20. Arequipa01 says:

    @atandon

    Just a comment (not a knock on the idea you are developing). Corporations that outsource are seeking to arbitrage more than just base wages. An employee in Manila, Philippines operates within a very different legal framework. Additionally, US Corporations are dedicated to shrinking the US economy, I mean, they’re committed to a business that consists of cannibalization of US operations and short term gains achieved through wage and environmental arbitrage schemes. Millions of MBAs running the show and their best idea is to take a sh*t in someone else’s yard and corral a bunch of peasants. Thank you, Wharton!

    Increasingly the big corporations are shifting divisions abroad to position assets outside of the US jurisdiction- to wit- GE MRI to Beijing. Is it perhaps because Immelt and gang know that GE’s liability for use of gadolinium can no longer be contained and that eventually their efforts to suppress and censor scientific research on Gd’s devastating effects on kidneys, etc will hit a tipping point?

    Once they achieve the dissolution of law and establish the regime of ‘shared norms’, they’ll come back.

  21. wally says:

    “It has been rumored for months that Obama will issue an executive order requiring Fannie and Freddie to refinance every residential mortgage in the US”

    It has? really? Where did you hear this ‘rumor’? Or did you just make it up?

  22. bcat says:

    We could people back to work if we had our industry that has gone over seas because of cheaper income tax. Tax for the big company is 37 percent and in Ireland is 12.5 percent. Lower the interest rates to @0 per cent max. and if they do not come back put a tariff on that is high and force the to bring the jobs back home for we are there main market. We have plenty of empty factories and unemployed people that are train for these factories before they move overseas.If we get our people back to work America will do fine.

  23. bbt says:

    rktbrkr Says:
    …we have a great opportunity to completely replay the great depression with a dose of austerity nowimposed by a minority of political zealots.

    Since a zealot is a person with a fervor for a cause, or endeavor, and you seem to have a fervor for more government stimulus, does that make you a political zealot as well?

  24. dsawy says:

    Still no self-reflection out of Bernanke. Still no admission that he and the Fed might bear some actual responsibility for the situation in which we now find ourselves.

    Why do we have a Federal Reserve again? Wasn’t it to prevent financial panics like this one and the Great Depression, and the Fed was legislated into existence after the 1907 panic?

    Seems to me that the Fed ain’t really solving the major problems they have been created to prevent.

  25. toba says:

    Ben Bernanke is a complete and total failure. When will someone in power (besides crazies on the right) realize that this man has absolutely no damn clue what he is talking about. His economic theories should have been discredited years ago yet he was voted Time’s man of the year. The president reappoints him saying he prevented a depression. Whatever…there is no hope.

    By the way, the deficit spending will keep the depression contained but the only solution to getting out of this mess quicker is debt forgiveness. Stephen Roach, Steve Keen, and many others have advocated it. There is no chance in hell we will ever see it with Bernanke in power. He is nothing but a tool for the financial industry.

  26. Transor Z says:

    From “The Onion”

    Historians Politely Remind Nation To Check What’s Happened In Past Before Making Any Big Decisions
    http://www.theonion.com/articles/historians-politely-remind-nation-to-check-whats-h,26183/

    “It’s actually pretty simple: We just have to ask ourselves if people doing the same thing in the past caused something bad to happen,” Collins continued. “Did the thing we’re thinking of doing make people upset? Did it start a war? If it did, then we might want to think about not doing it.”

    In addition, Collins carefully explained that if a past decision proved to be favorable—if, for example, it led to increased employment, caused fewer deaths, or made lots of people feel good inside— then the nation should consider following through with the same decision now.

  27. dlyulkin says:

    The unemployment situation is being overthought and overpoliticized. I believe there is a fairly straightforward solution which I discuss here:

    http://www.cardiffassetmanagement.com/blog/2011/09/29/jobs-jobs-jobs/.

    To summarize: Congress can spend $48 billion over the next 24 months to create one million new jobs. The math is easy. Start with $2 billion a month. That’s 20,000 salaried employees making $50,000 a year for two years. Since Congress won’t agree to foot the entire bill for a new employee, let’s cover 50% of each new employee’s wages for two years. Now we created 40,000 long-term positions in a month. Let’s do this for 24 straight months and we only spent $48 billion to generate 960,000 jobs. We can probably double that easily and spend $100 billion to put 2 million people to work.

    Let’s open this program only to businesses with under $100 million in revenue to make sure it hits its intended target. Put a cap in place on the number of employees a business can hire under the program and you have something raw, but relatively viable. I can tell you with certainty that small business owners will start hiring if they know a 50% tax credit is coming for their new employee for two straight years.

  28. ToNYC says:

    “Monetary policy can do a lot, but monetary policy is not a panacea,” Bernanke said.

    The Bernank’s Monetary policy is likely not a panacea; however a poison pill might be more like it.
    A total ZIRP myopiac.