The central bank released new economic projections that showed weaker growth in both 2011 and 2012 than had been forecast just two months ago. Despite the slowdown, the Fed said it will end a program of buying vast sums of Treasury bonds at the end of June as scheduled and gave no sign it is contemplating new action.
But Bernanke, whom markets turn to as a purveyor of economic wisdom, said the Fed had no solid answers as to why, two years into an economic recovery, growth keeps disappointing. Washington Post
There has got to be some definitive work showing that if unemployment remains way above historical norms in a financial crisis that an economy is not going to grow sufficiently because of unusually low demand for goods and services…
I take a little solace that the Serious People have been proven wrong for two years in assuming the economy can do well with historically large unemployment numbers. At least inequality hasn’t come so far that 9%-18% of Americans can get locked out of the economy and everything is fine.
High hopes in 21st century America.