Federal Reserve Meeting Minutes - a world of hurt for working America
Ok, we are already way past the Federal Reserve's previous predictions of unemployment. Remember that? "Oh, unemployment won't hit 10%" according to Bernanke testimony. The unemployment rate is at 10.2%, U6 is 17.5% and growing.
So today we have more forecasts.
- Q4 2010 - 9.3% to 9.7%
- Q4 2011 - 8.2% to 8.6%
- Q4 2012 - 6.8% to 7.5%
Good god, can we get some real labor and jobs policy going that deals with the real facts of labor economics? These numbers imply we're going to destroy hundreds of thousands of middle class lives....permanently.
Most officials said it would take five or six years for growth, unemployment and inflation to return to levels consistent with the central bank’s goals, the minutes said. Some participants said it may take longer, according to the Fed.
5 OR 6 YEARS!!! Gets worse. Many Federal Reserve Staffers predict much worse numbers:
The decline in policy makers’ unemployment projections contrasted with the forecast of Fed staff economists, who increased their projection for the jobless rate “over the next several years,” the minutes said. The report didn’t specify the new staff projections; minutes of the previous meeting in September said staff economists projected a rate of 9.25 percent by the end of 2010 and about 8 percent by the end of 2011.
The Federal Reserve's U.S. GDP Forecast:
- 2010 - 2.5% to 3.5%
- 2011 - 3.4% to 4.5%
- 2012 - 3.5% to 4.8%
Does that seem too optimistic to you, given current labor, trade, incentives, tax policy?
Inflation is projected to be in the 1% range.
Yet at the same meeting, Fed Officials Said Low Rates May Fuel Speculation .
Federal Reserve officials said record-low interest rates might fuel “excessive” speculation in financial markets and possibly dislodge expectations for low inflation, according to minutes of their meeting released today.
“Members noted the possibility that some negative side effects might result from the maintenance of very low short-term interest rates for an extended period,” minutes of the Nov. 3-4 meeting said, “including the possibility that such a policy stance could lead to excessive risk-taking in financial markets or an unanchoring of inflation expectations.
What was that about the mother of all carry trades?
Meanwhile read this post, Rewarding Failure, on the top questions to ask Ben Bernanke during his confirmation hearing. May a diligent Senator literally read these questions from this blog and ask them. Why are we reconfirming the head of the Federal Reserve who got so much, so wrong and fights transparency to boot?
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- Email this Instapopulist Forum topic
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The uber-greenshooter wilts
Another sign of how bad it’s going to get for labor:
Today, Boondadd followed his protégé greenshooter New Deal Democrat into the reality of the economic abyss we are in. With the reporting of the ‘new’ GDP for the 3rd quarter significantly less than the previous estimate, the tone of his writing changed.
The ‘Yea Saying’ mocking ‘Doom and Gloomers’ has turned to grim reality. He writes: “I think the FOMC minutes were another "things are less bad" report, but there are still very real concerns about the fragility of whatever recovery we may experience and the ease with which it might jump the tracks.”
I fear we are in the eye of an economic hurricane. When the backside wind hits, it will make last year’s look like a breeze.
That doesn't make me a 'doom and gloomer' - just scared.
We should be scared.
We have serious structural defects in our economy. We have meager job growth even before crisis and now we have even deeper hole. Against that backdrop we have a situation where wages growth has stagnated. We have people wanting to maintain their standard of living with increase debt.
The problem is policy makers in Washington don't have the courage to buck their corporate benefactors do what is right for the rest of the country. IMO, we need dramatic action the will is not there to do it. We needed to press re-set on the financial sector including nationalizing the zombie banks - we didn't do that. We needed true debt/mortgage forgiveness to address the negative equity problem in housing - we didn't do that. We needed real financial reform that included in some form breaking up "too big to fail" - we didn't do that. We need a serious jobs program including new training - and probably won't get that. We need a industrial strategy - and probably get more talk than action. We need some thing to provide a countervailing power to corporations - we won't get that. We need a National Infrastructure Development Bank - but won't get that.
So, yeah I think we should be scared.
RebelCapitalist.com - Financial Information for the Rest of Us.
We have already destroyed hundreds of thousands of middle class
I have been doing an extensive research on what is happening here in America and I would like to you take a look at what has happened as I believe you will recognize what is happening here.
Take for instance this chart that was prepared using the BLS/OES data
http://keepamericaatwork.com/?p=5187
Over a million jobs lost before this crisis even happened.
I also have an extensive set of articles you can find on that site by looking at the sidebar articles in red and I'm sure you will find the wages and GDP articles interesting.
Especially this one that shows that our corporations quit investing in America in 2007, again before the current crisis began in the fall of 2008 and as a matter of fact, I believe that the housing crisis is a symptom of this and not the real cause.
http://keepamericaatwork.com/?p=5379
I also have a solution I believe will resolve the problem immediately that you can read by clicking on the next article
http://keepamericaatwork.com/?p=5245
Respectfully,
Virgil
http://www.KeepAmericaAtWork.com
uber-greenshooter rails
It would be the height of arrogance to think that Bonddad the economic star of Huffington Post would respond to me. But, the coincidence is delicious.
This morning I posted the above comment: “The uber-greenshooter wilts” in which I suggest that one DAD’s quotes indicated he was losing faith in the greenshoot ‘weltgeist.’
Well low and behold doesn’t he come back this afternoon with:
“A Personal Note to the Doom and Gloomers from Bonddad
“I (as in Bonddad) still believe the economy will grow in the 1%-2% range for the next few quarters. I have been saying that for the previous 6 months. Until I see otherwise, I will continue to hold to that prediction. In case you are wondering, there are several reasons for this...’’
I have yet to see any data which seriously undermines the above points.”
He has not seen any data which seriously undermines the above points!!!
Where does he look? Obama’s press releases.
Well I hope he is right. If he is not, we are in for a world of hurt.
Gez, ok,
to maintain the status quo, GDP must grow 1.5-2%. See productivity, jobs, outsourcing.
So, what is it with these personal attacks? Let's keep that off of here shall we? Frankly, I am not amused by Bonddad or NDD's personal attack posts that I've seen and frankly, one can argue the facts but some of these things....well, aren't sticking to "when in doubt use your calculator" which is the EP motto.
So, back to this claim, obviously the status quo is not ok, I'm not sure if that's even a technical recovery, considering the growth in population.
So, us realists, we'll just stick to the data and stats....just because reality is doom & gloom doesn't mean one can wish it all away.
“personal attacks"?
“So, what is it with these personal attacks? Let's keep that off of here shall we?”
Sorry, but I did not think mine a “personal attack”. It was rhetorical, but that is a writing style to give emphasis to a moral argument. Facts and statistics are the material of economics. But morality is the end result.
Bondadd is a significant public figure that has influence on public opinion though the readers of his blog and more importantly in Huffington Post articles and, as I recall, radio. It seems to me that he, and others, must be responded to not only with facts and numbers but with drawing out the ethical implications of their writing.
Having said that, I respect the fact that this is your blog and I will conduct myself accordingly.
maybe you are right
Just earlier we had some ugliness with someone else, but honestly, I guess I should call them "call outs" instead of personal attacks but they are directed at one person, but those guys went after him and he them.
I guess I'll stay out of this one after all. I'm still shocked that NDD suddenly changed and said we're a bunch of Doom & Gloomers and stopped writing on EP.
On the other hand, if NDD had written some of those pieces on EP, the readers would have slammed him right then and there.
Anywho, do what you will, you have a good point and I'll just stay out of all of it.
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