Posted by AzBlueMeanie:
The fundamentals of the economy remain anemic: unemployment is still above 8 percent, GDP growth in 2Q of 2012 slowed to 1.5 percent, and a host of indicators suggest that the recovery has weakened as a result of the global economic slowdown in Asia and Europe, and the end of federal stimulus spending and austerity measures by state governments in the U.S.
Tea-Publicans are blocking every White House attempt to create jobs in an effort to sabotage the economy for partisan political advantage in an election year (something for which every last one of them should be turned out of office). The best hope for workers lies with the Federal Reserve. But Federal Reserve Chairman Ben Bernanke is fiddling while the economy burns weakens.
James Downing writes at The Morning Plum: The Fed punts - again:
After a two-day meeting, though, officials at the Federal Reserve announced that while they know the economy’s getting worse, they won’t do anything about it yet:
The Federal Reserve took no new steps to support the economy Wednesday, but it said in a statement that it was ready to act if job growth did not improve. The statement, released after a meeting of the Fed’s policy-making committee, said that the rate of economic growth had slowed in recent months and was likely to remain ‘moderate over coming quarters.’ As a result, the Fed said it expected the unemployment rate to decline ‘only slowly.’ But the central bank deferred any effort to improve the situation at least until the committee’s next scheduled meeting in mid-September.
“The committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability,” it said
At this point, the Fed’s inaction has passed from ill-advised to disgraceful. On a policy level, the Fed has a dual mandate: to combat inflation and unemployment. Inflation is expected to be below 2 percent for the next five years, an extremely healthy number that should give the Fed plenty of room to print money. But instead, while millions stand in unemployment lines, Ben Bernanke and company sit on their hands.
But a disturbing indifference to Americans’ economic plight isn’t the only thing holding the Fed back: Republicans have played their part as well, stoking false fears about inflation and warning the Fed that it better not act “politically”, with the somewhat ironic threat that “Bernanke backs off or political interference comes next.”
In the past, frustrated Democrats have accused the GOP of trying to stall the recovery until after the election. Until the Fed decides to actually do something, Democrats and liberals should make a political and policy case more directed at the Fed, too: as of right now, the Fed is holding the economy back, and the Republicans are putting party over country in encouraging the agency to stay idle.