Bernanke puzzled by weak consumer spending

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He should go back to Princeton and teach How Not to Conduct the Fed. How he got appointed in the first place (by both Bush and Obama) is still a mystery.
 
He should spend six months working a part-time job at minimum wage with no other means of support.

It might wake him up.
 
Unfortunately, the really important things that would help the economy most are beyond his power:

Firing Obama and Reid.

But the reality is that consumer spending is not a whole lot lower than it was prior to the recession. It really spiked upward right after Obama was elected, then plunged out of sight almost immediately, then got into a range of ups and downs not entirely unlike those prior to 2008.

Consumer spending isn’t an entire economy. There is also investment and hiring, which employers are afraid to do because of the radical leftists in Washington.
 
Ridgerunner said:
But the reality is that consumer spending is not a whole lot lower than it was prior to the recession. It really spiked upward right after Obama was elected, then plunged out of sight almost immediately, then got into a range of ups and downs not entirely unlike those prior to 2008.
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Actually most of the government “spending” has been in the form of tax cuts, tax credits, and state bailouts. Much of this was used to reduce personal debt. Nothing much in the way of promised infrastructure. Of the $850 Billion (stimulus), $300 Billion went unspent and probably forfeited with the new Congress. (One Congress can’t bind the next). And it’s highly unlikely the new Congress will fund the remaining $300 billion.

The real jump in the debt was a result of the Fed printing money through QE1 and QE2 and buying almost $2 Trillion of Treasuries which sits with the 12 Regional Federal Reserve banks. The taxpayer is nevertheless on the hook for the interest and full payment when these bonds come due. What supposedly puzzles Bernanke is why these banks, borrowing money at 0 to 2% don’t lend this out. But why should they if there is no demand for anything.
 
what does he expect??!! people are trying to save their homes or have already lost them.
we are trying to save our vehicles or have already had some repossessed. no one knows what will happen next. will we be laid off? will we be able to find a job? we don’t have confidence in our government or the economy. so why should weak consumer spending puzzle him? this is not the economy of the 90’s!!!
 
Investors Business Daily had a nice article about Bernanke, his puzzled understanding for the weak economy, and what can be done to help get the economy rolling once again.

“Best Policy Of All: The Ballot Box”
The Fed: In what might be called a “half-a-loaf speech,” Fed Chairman Ben Bernanke shows he at least gets why our economy’s in such lousy shape. But in the same talk, he misdiagnoses who’s to blame and what to do about it.
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So why are we having such a bad time right now? Well, the slowest recovery ever is a result of a much deeper than average correction in the housing market. Because of the financial system’s enormous exposure to the massive buildup in housing debt, a severe financial crisis swept the globe after home prices fell in 2007 and 2008…
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.

The rest can be seen at:

investors.com/NewsAndAnalysis/Article/584251/201109081856/Best-Policy-Of-All-The-Ballot-Box.htm
 
Resign now, Mr. Bernanke. The private sector, the golden goose, the engine of America is being strangled by the Feds and the States. Most of us are making much less than we were five, ten years ago. Wages and benefits have been cut for many, many people among those who still have a job. Come out of the Washington Ivory Tower and speak to us ordinary folk. :doh2: Rob
 
ProVobis said:
The real jump in the debt was a result of the Fed printing money through QE1 and QE2 and buying almost $2 Trillion of Treasuries which sits with the 12 Regional Federal Reserve banks. The taxpayer is nevertheless on the hook for the interest and full payment when these bonds come due. What supposedly puzzles Bernanke is why these banks, borrowing money at 0 to 2% don’t lend this out. But why should they if there is no demand for anything.
Click to expand...
I’m not sure where you’re getting this. For the Fed to buy treasuries, there had to be a seller, right? That’s government debt. He didn’t spin the debt out of thin air.

The primary lack of demand for money, as any banker will tell you, is on the business side. The most profitable part of bank lending is on business loans. Business people just don’t want to borrow because they know they’re dealing with a government that is fundamentally hostile to them and has lots of social and economic “changes” it wants to make, like high energy prices, high health insurance costs, high regulation and God only knows what. Best to just stand pat. There was a lot of that during the Depression.Businesses just adjusted down to what they absolutely knew they could count on and didn’t do anything more than that, and became very debt-averse. Interestingly, during the Depression there wasn’t much demand for business loans either. No need for them.

Those situations are very hard to get out of, and the longer they go on, the harder it becomes to extricate an economy from them, because nobody does anything that’s “forward looking”. Spending for public works projects didn’t fix it then, and it won’t do it now. It’s more an ability to see what lies ahead, and right now business people just see more of the same on the horizon, perhaps worse.

I see the stock market went below 11,000 today. I have read that even big businesses have done about all the “trimming” they can really do in order to get profits up, but that those profits are not expected to be stellar in 2012 at all.

Bernanke can’t fix any of that. He’s dealing with a country that’s run by radicals, and is trying to induce SOMEBODY to spend money. Imagine what hiring would be like if interest rates floated up to, oh, let’s say 15% for business loans and 12% for consumer loans. We would be eating Rolled Oats fried in grease on hot plates within two years of that.😦
 
You are all wrong. Our leaders followed the advice of economists and other experts. And they are never wrong and we must always follow their advice. After all, they are the experts. And they have peer reviewed articles published, so it’s all settled. The only reason the economy has not come back is because…well just trust the experts.😃
 
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