Five years ago, a subprime mortgage firestorm was melting down the U.S. economy, but most analysts didn't see it happening.
Federal Reserve Chairman Ben Bernanke, testifying before Congress in February 2007, said the housing sector "is a concern, but at this point we don't see it as being a broad financial concern or a major factor in assessing the course of the economy."
If he and the vast majority of economists were blind to the economic and financial calamity taking shape then, could they also be missing the start of a huge economic boom now?..In recent months, economists have been consistently wrong about the strength of hiring. In fact, the Labor Department said it had been too negative. It revised previous months to show that the economy gained a total of 60,000 jobs more than originally reported for November and December.
So if they were so wrong in seeing the Great Recession coming, it's possible they are blind to the "Great Recovery" that might be under way.
Bottom line: Most economists are blind to the business cycle, even the great business cycle manipulator himself, Ben Bernanke.
What we are currently experiencing is a Fed manipulated boom, but none the less, it is a boom. Developing right now and forecast right here at EPJ.
Where the bust was also called.
They only know that by pumping money IMO the economy will eventually boom, just takes longer during a recession. As Greenspan did for Bush, Bernanke does for Obama.
ReplyDeleteNPR always gets it wrong!
ReplyDeleteThe rise in employment is due almost entirely to the new oil fracking business, the very same enterprise Obama sought to hobble by refusing the pipeline connections to carry it to our refineries.
That was a payoff to Buffett since his railroads now get more "tanker" traffic instead!