Federal Reserve Chairman Ben Bernanke is testifying before Congress again today about the current recession and Fed monetary policy. Once again, he reiterated his stance that the recession will end sometime in the second half of 2009.
I have no idea why he would say this – considering the current state of the economy. If I didn’t know better – I would say he’s just guessing. The truth – as we’ve learned – is that he is certainly aware that this ‘recession’ is not going to end this year.
Regardless, it’s amazing to me that so many intelligent people could be deceived by someone who has not been telling the truth for a couple of years now. Ben speaks and everyone seems to feel a little better. The question is – should we feel better?
Let’s take a look at some of Ben’s past comments and you tell me if we should believe anything he tells us.
jg – July 22, 2009
June 4, 2009 – Federal Reserve Bank Chairman Ben Bernanke has told a budget committee in the US that the recession should see the beginning of the end later this year.
May 5, 2009 — “We continue to expect economic activity to bottom out, then to turn up later this year,” Bernanke told lawmakers, sounding more confident about the prospects for a recovery later in 2009.
April 14, 2009 — “Recently we have seen tentative signs that the sharp decline in economic activity may be slowing,” Bernanke said in a speech at Morehouse College in Atlanta. “To be sure, we will not have a sustainable recovery without a stabilization of our financial system and credit markets.”
April 3, 2009 — He said he expects a “gradual resumption of sustainable economic growth.” However, he didn’t say when – in remarks to a Fed conference in Charlotte, N.C.
March 15, 2009 — “We’ll see the recession coming to an end probably this year,” if the government succeeds in bolstering the banking system, Bernanke said in an interview with CBS TV program “60 Minutes.”
March 10, 2009 — The recession was more severe than the Fed had expected, Bernanke acknowledged after a speech to the Council on Foreign Relations. Still, he added there’s a “good chance” the recession could end this year if the government managed to get financial markets to operate more normally again.
March 3, 2009 — Testifying to the Senate Budget Committee on the bailout of American International Group Inc., Bernanke didn’t repeat remarks he had made a week earlier that the recession could end this year if the government succeeded in turning around wobbly financial markets.
Feb. 24, 2009 — Bernanke said he hoped the recession will end this year, but that there were significant risks to that forecast. Any economic turnaround will hinge on the success of the Fed and the Obama administration in getting credit and financial markets to operate more normally again. “
Jan. 13, 2009 — “Fiscal policy can stimulate economic activity, but a sustained recovery will also require a comprehensive plan to stabilize the financial system and restore normal flows of credit,” Bernanke said at the London School of Economics.
“Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.
U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president’s Council of Economic Advisers, in testimony to Congress’s Joint Economic Committee. But these increases, he said, ‘largely reflect strong economic fundamentals,’ such as strong growth in jobs, incomes and the number of new households.”
-Washington Post, October, 2005
“A leveling out or a modest softening of housing activity seems more likely than a sharp contraction”
-in testimony to a House Financial Services Committee, Thursday, February 16, 2006, (source: Washington Times, February 16, 2006)
“We think that, by the spring, early next year, that as these credit problems resolve and as we hope, the housing market begins to find a bottom, that the broader resiliency of the economy which we are seeing in other areas outside of housing will take control and will help the economy recover to a more reasonable growth pace.”
-in testimony to the Joint Economic Committee on Thursday, November 8, 2007 (source: “Nightly Business Report,” Thursday, November 8, 2007)
“The Federal Reserve is not currently forecasting a recession.”
-after a speech given in Washington, D.C., on Wednesday, January 9, 2008 (source: AFP, Thursday, January 10, 2008)
“My baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of (Fed) and fiscal stimulus begin to be felt.”
-in testimony to the U.S. Senate Committee on Banking, Housing, and Urban Affairs on February 14, 2008 (source: FederalReserve.gov)