On 6/22/11 we heard Ben Bernanke say that unemployment was stubbornly high, but felt to be temporary. On 6/23/11 we learn that initial claims for unemployment unexpectedly rose to 429,00.
One of the Federal Reserve's mandates is to maximize employment. This has simply not been addressed by Fed policy - while at the same time the Fed has instead focused its attention on its self-created third mandate of propping up the stock market.
Mr. Bernanke is utterly clueless about what is to shortly occur in the labor market. I'll give you a hint:
Just today, Philadelphia newspapers confirmed that 1600 teachers were given layoff notices. That is just one city in one state. State, municipal and school district budgets are near finalization. These budget cutbacks will bring thousands upon thousands of layoffs. These layoffs will impact communities from top to bottom. Consumer spending, payment of property taxes, collection of state taxes falling due to lost jobs, added foreclosures and a multitude of other negative things. And this is what is coming up - today looks pretty good in comparison. I suspect that the four week average of initial claims will be trending on the 500,000 or above bar by September.
Going back to the Fed chairman's status as a "student of the Depression". I've long held that any person with an undergraduate degree can get a master's degree as long as they are willing to continue to pay an academic institution to get it. But to earn a doctorate degree, one has to take the requisite courses, pass a comprehensive exam and defend one's dissertation. Mr. Bernanke is in the process of failing to do this.
No authoritative body will award a Ph.D based on his body of work. His QE results do not support his assertions. His zero percent interest rate policy has rewarded a corrupt banking system and "pink slip mongering" group of multinational corporations at the expense of the (working) class and savers. Just today Discover Cards announced record profits. I would guess so - they get money at close to zero and lend it out from 7-22%.
And what body would award a doctorate degree after hearing him state yesterday that the Greece situation should have minimal impact on US banks when he has no idea of derivative exposure? No idea whatsoever.
Our monetary policy is being guided by an individual "student" who could not pass muster to earn his doctorate degree. Perhaps Congress could better utilize its time and resources researching how to recall (fire) such an individual. While they're at it - they should explore similar options with regard to Treasury Secretary Geithner. Both are in the process of destroying our country It is best to act before it happens.
