Déjà vu all over again. Another spring, another housing-recovery chorus. Grass turning green, another turning of economic corner. Days longer, oil higher, a new fatal shortage nigh. Vernal equinox, Fed easing must be overdone, bond yields rising, the easing propelling inflation trading and the stock market.
Spring, and the sweet scent of horse manure.
Birds are chirping, leaves and blossoms bursting open, but the economy is still largely where it has been since bouncing off bottom in the spring of 2009. Home sales are not rising, new or used; prices may have flattened, but are not going up; and the distressed housing pig in the python still threatens to depart the pig in alarming mass, volume, and velocity. Oil is fooling around a hundred bucks, but it’s impossible to square a dangerous shortage with substitutable natural gas one-seventh its price at the decade peak ($15.38/MBtu in December 2005; $2.29 this week); US oil imports falling from 60% of consumption to 50%, on the way lower; and global coal un-doing its entire run from 2007-2011, $165/ton to $65. The jump in bond yields began to reverse this week the instant that Perfesser Bernanke said, “It’s far too early to declare victory.”
The biggest deal, of course, is jobs. While waiting for next week’s Good Friday release of March payrolls, consider more from Mr. Bernanke this week:“Importantly, despite the recent improvement, the job market remains far from normal; for example, the number of people working and total hours worked are still significantly below pre-crisis peaks, while the unemployment rate remains well above….”
Alternate to the drivel that passes for economic news on CNBC, Fox, and Bloomberg (and the opinion pieces of WSJ and NYT), please try to read the few pages of the Perfesser’s full speech. It’s in English, and a model for how to suspend your biases and hunches and mull evidence while the hopes of the world depend on your judgment.
All seems normal: pain evident among some friends and many strangers, but cars and trucks move as always, lights come on at night, shoppers and goods in stores, but all a mask covering US government absent as never since the 1920s. Maybe the 1850s. Congress too afraid of constituents to speak truth. This poor man, President, soon may endure Supreme Court overthrow of his sole domestic achievement (no matter at whose hand: it would have collapsed of its own over-complication and expense).
Want a hero? Someone to hold up to your kids as an example? Somebody above and beyond in public service? Selfless? Wishing only to be inconspicuous, but pushed forward by events? Leading as few ever have before? Leading decisively through chaos, but including his opponents, and even encouraging their public disagreement?
Have you given up, that there are such people in public life? Excoriated every day by blimps not half his intellect, not a tenth his understanding, yet treating all with dignified firmness? And in private — his actions always in private — as decisive as any Napoleon, and more aware of the consequences of error than any captain of arms?
Ben S. Bernanke. Annual salary $191,300. Maybe a rich-making book at the end, like his failed predecessor, maybe quiet passage to retirement like Paul Volcker.
Mr. Bernanke blew it as Greenspan’s understudy 2002-2005, and in his first year as Chairman, 2006. He missed the credit bubble, which he knows more deeply and painfully than anyone else alive. He was slow to grasp the extent of emergency in July, 2007, but he got it in the following January and ever since he has carried this nation on his back. He has been the singular effective executive in US government, holding the night at bay, two Treasury Secretaries and two Presidents in over their heads.
The Perfesser knows better than anyone that his utterly experimental measures to stop the greatest bank run of all time risk an inflation disaster. And he knows that no matter how hard and inventively he tries, he may be unable to prevent a re-run of the 1930s, especially with no help from the rest of government.
One man, a quiet academic, embracing disciplined doubt, clear-headed and willing to act. Warm, glowing Spring hiding emergency. Do tell the kids someday.