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Mike Konczal: Bernanke Upside Down

Mike Konczal:

Bernanke Gives a Press Conference: The big takeaway from Federal Reserve chairman Ben Bernanke's historic press conference was that the focus, both of questions asked and Bernanke's own remarks, addressed a situation that would be the exact opposite of the one we're in now.... We have seven million people out of work since the crisis (on top of the number of those who would have been out of work without the crisis)... it will take years, 2014 or beyond, before the country approaches a normal unemployment rate.... [T]he Fed is doing neither of its two jobs. Unemployment is too high, and inflation too low, so it should be doing whatever it takes to stimulate the economy. The natural question that puts pressure on Ben Bernanke is: "Are you worrying too little about unemployment? And are you worrying too much about inflation?"

But if you got all your sense of the world from the questions that were asked during the press conference, you would expect that unemployment wasn't a major problem and crushing inflation was just around the corner.

At the press conference, roughly nine questions worried about inflation, a weak dollar, the country's S&P rating, oil prices, and whether the government can fashion an appropriate response to the financial crisis or long-term unemployment at all. These all reflect the worry that government is doing too much instead of too little. Meanwhile, there were only two questions asking why the Federal Reserve wasn't doing more to lower unemployment. When Binyamin Appelbaum asked, "Is it in the Fed's power to reduce the rate of unemployment more quickly? How would you do that? Why are you not doing it?" it was almost out of place.

Bernanke himself reflected these priorities. He cited keeping the financial sector from collapsing as the extraordinary measure the Federal Reserve has accomplished. He discussed current Federal Reserve efforts as something that will prevent a slow down rather than promote a faster recovery towards the long-term trend of growth. He seemed far more worried about inflation than about the current level of unemployment, and more worried about the Federal government's deficit than putting fiscal policy into play...