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When are investors going to stop getting suckered by Ben Bernanke?
On forecasts, the Fed chairman is about as useful as a New England weatherman.
As for the talk of more quantitative easing: A close reading of Bernanke's word's make you wonder if he even understands the crisis at all.
Let's look at the forecasts first. "I expect the economy to continue to expand in the second half of this year, albeit at a relatively modest pace," Bernanke said at Jackson Hole.
And maybe Ben Bernanke's economic forecasts aren't any worse than anyone else's.
But that's hardly the point, is it?
And even if they're no worse, are they any better?
In the past, the bulk of this has come from the consumer. But look at the numbers. American families, according to the Federal Reserve itself, already owe $13.5 trillion. That is twice what they owed ten years ago, and four times what they owed twenty years ago. For all the talk of people repairing their balance sheets, that figure has fallen by a grand total of 2.7% from its all-time peak in 2008.
Meanwhile, the unemployment figures are far worse than the government admits. (Bernanke himself said as much. "The small decline in the unemployment rate is attributable more to reduced labor force participation than to job creation," he said. Think about that for a second if your definition of "unemployed" doesn't include those who have ceased to participate in the labor force, what use is it?).
We can find the real numbers for ourselves. The Labor Department's own data show that among adult men of prime working age, 25 to 54, just 81.2% have a job of any kind at the moment. (The figure until the crisis was nearly 90%, and back in the fifties it was around 95%).
The Labor Department further admits that a further 7% of those men are stuck working part time -- a sharp increase from two years ago, due to the financial crisis.
Put the two together and you discover that 25% of men of prime working age in America, one in four, today lacks a full-time job. Nearly one in five lacks any job at all. This is unprecedented in American history.
Millions of families are broke, up to their eyeballs in debt and unemployed. And they can't get credit, because lenders are at last worrying about whether they can pay the money back.