Didn't the same congressmen that now criticize Bernanke for years sign off laws that enable government expansion, wars overseas and reckless spending? I do not understand why Bernanke is the sole focus point of criticism. The US public (reckless private spending, voting idiot presidents and congressmen into office) and politicians (reckless public spending) are first in line for the electric chair IMO.
Indeed, GDP growth ideally comes from the private sector. But if objectives are met, private sector will pick up where government left off once stimulus is withdrawn. Therefore, the current government spending is necessary in the long run. Maybe not to the extent the USA is currently spending, but some. I understand Americans' anger with regards to future tax hikes and the reckless spending of their money. I am fortunate enough not to have this on my mind, so that fact could bias my opinion slightly. Comparing Greece to USA in that instance is certainly futile. But the fact remains that that comment increased USA economic data credibility. I know many would argue against USA credibility, but I am not sure where the skepticism comes from? The skepticism was not present before the crisis (at least not to this extent). Sketchy bailouts where the public wasn't fully informed or didn't fully understand what was happening could be a part of it. You are right on your last point. And even I am critical of Bernanke on this. However, I am not sure that anyone else would have done anything differently. Greenspan's policies are evidence. By Bernanke being confirmed, a lot of uncertainty has been removed. We all know what Bernanke's plan is and how he will execute it. If someone else was appointed in his position, who knows what the next move would be?
My thoughts exactly. It is not Bernanke's responsibility to determine how the government spends money. I think he's taking the blame because most people think in terms of quantitative easing = money printing = dollar devaluation = end of USA supremacy. Congressional policies are much more to blame than the Fed.
What are the Federal Reserve's responsibilities? Today, the Federal Reserve's responsibilities fall into four general areas: *conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices *supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers *maintaining the stability of the financial system and containing systemic risk that may arise in financial markets *providing certain financial services to the U.S. government, to the public, to financial institutions, and to foreign official institutions, including playing a major role in operating the nation's payments systems So how is Bernanke doing in his ares of responsibilites Makloda ?
It probably does. I look at my little boy playing in my living rood and then watch Congress blowing out the budget for the third time in as many years. When I see what my little boy will inherit, I get fumed. So does the majority in this country. And if the spending was actually DOING something for jobs, productivity, etc, then that would be something. But the spending you're talking about hasn't done jack except move statistics. As for the credulity of numbers, when a number is revised 30% from period to period (the previous GDP number) it makes one wonder. It also makes one wonder why these statistics aren't ever revised up. As for my anger with Banana Ben, yes it has to do with the currency. It also has to do with him offloading risky assets from banks to the taxpayer. And the anger is directed at him because he was the one going for confirmation. But I hate Timmah, and Paulson and the rest of the jackasses in government who allowed this to happen and continue to allow it to grow. But they weren't up for reconfirmation. Banana Ben was.
Just as good as the next monkey in line if he wasn't there. What's your point? If Bernanke was never born the financial system wouldn't be in exactly the same trouble?
More on GDP from Rosenberg, courtesy of ZeroHedge.com... ------ Rosenberg spots an oddity in today's GDP report: where did the boost in inventory come from? It sure wasn't from imports. It was a tad strange to have had inventories contribute half to the GDP tally, and at the same time see import growth cut in half last quarter. Normally, inventory adds are at least partly fuelled by purchases of foreign-made inputs. Not this time. Strip out inventories and the foreign trade sector, we see that domestic demand growth in the fourth quarter actually slowed to a paltry 1.7% annual rate from 2.3% in the third quarter. Some recovery. Based on some simulations we ran, demand growth with all the massive doses of fiscal and monetary stimulus should already be running in excess of a 10% annual rate. So, the real question that nobody seems to ask is why it is that underlying demand conditions are still so benign more than two years after the greatest stimulus of all time. The answer is that this epic credit collapse is a pervasive drain on spending and very likely has another five years to play out. And where did the miraculous productivity boost come from? If you believe the GDP data â remember, there are more revisions to come â then you de facto must be of the view that productivity growth is soaring at over a 6% annual rate. No doubt productivity is rising â just look at the never-ending slate of layoff announcements. But we came off a cycle with no technological advance and no capital deepening, so it is hard to believe that productivity at this time is growing at a pace that is four times the historical norm. Sorry, but we're not buyers of that view. In the fourth quarter, aggregate private hours worked contracted at a 0.5% annual rate and what we can tell you is that such a decline in labour input has never before, scanning over 50 years of data, coincided with a GDP headline this good. Normally, GDP growth is 1.7% when hours worked is this weak, and that is exactly the trend that was depicted this week in the release of the Chicago Fedâs National Activity Index, which was widely ignored. On the flip side, when we have in the past seen GDP growth come in at or near a 5.7% annual rate, what is typical is that hours worked grows at a 3.7% rate. No matter how you slice it, the GDP number today represented not just a rare but an unprecedented event, and as such, we are willing to treat the report with an entire saltshaker â a few grains wonât do.
Strip out inventories, GDP 2.3% PCE Q3 = 2.8% Q4 = 2.0% Personal savings rate 4.6% Wait til the final revisions for Q4 GDP in March; this was a nonevent. No one really believes China's GDP #'s. 8 guys in a room cannot perfectly plan an economy to produce what China reports on an annualized basis.