The diminutive gentleman sitting behind the enormous prop desk of the premier episode of the "The Amazing Federal Reserve" was none other than Chairman Ben Bernanke. The momentous occasion was billed as the "first press conference ever." The unusual YouTube hour had all the staged contrivance of a tacky reality TV show. Fanfare leading up to the April 27 premier was much more exciting than the disappointing rhetoric that filled it. Like the fake reality show it is, the Federal Reserve wants Americans to believe that all is well in the hinterland.
One of the first "spins" spun by the Fed Chief was his statement that national unemployment had decreased nearly one percent over the last few months to 8.8%. His Chiefness failed to mention that the "99ers," those poor schmucks that collected unemployment for 99 weeks with no hope of becoming reemployed, are off the unemployment rolls--for good. His Chiefness also failed to mention the tens of millions of small business owners, freelancers, consultants, and sole proprietors without access to unemployment insurance who have tapped out friends and family in a desperate struggle for survival in the 2.5 years since Wall Street self-destructed.
The Fed Chief's soft spoken and unthreatening intellectual demeanor is temperamentally better suited to public discourse than his predecessor, Alan Greenspan. Former Fed Chief Greenspan ruled over the Federal Reserve, and subsequently U.S. monetary policy, like the perfect money monarch that he was for two decades. His long reign of free market euphoria ultimately ended like a vomiting chorus following fraternity pledge week of unlimited shots and bad behavior.
Is this a face we can trust, wondered those watching the Fed's Reality Star? The secretive money-milking Federal Reserve is growing increasingly suspect for an outraged and frustrated American public. The simple staging of the rare press conference by the 98 year-old Federal Reserve is an act of desperation that was hard to miss. The multi-media appearance was meant to calm fears around a modest and suspicious "recovery." Yet no matter how much sugar they pour on this baby, there is no way to convince a financially challenged America that the economy is getting "better."
It's About Jobs, Stupid!
Of the many tasks at the Federal Reserve, "full employment" is a core responsibility. Under the 1978 "Full Employment and Balanced Growth Act," the Federal Reserve was mandated "to translate into practical reality the right of all Americans who are able, willing, and seeking to work to full opportunity for useful paid employment at fair rates of compensation; to assert the responsibility of the Federal Government to use all practicable programs and policies to promote full employment, production, and real income, balanced growth, adequate productivity growth, proper attention to national priorities, and reasonable price stability."
Where are the Fed's efforts to provide: "Full opportunity for useful paid employment at fair rates of compensation?"
The Huffington Post's Steve Clemons reported that the "Real Economy" is short twenty (20) million jobs. Clemons cites national employment data issued monthly by former Obama finance committee member, Leo Hindery, "showing what is real and what is not regarding the Bureau of Labor Statistics' monthly release of jobs data." Hindery's findings document "real" unemployment at 17.7%.
Hindery writes that the Federal Reserve data includes "only a survey of households" rather than much more accurate payroll data. He notes that the numbers exclude "the nation's 11.0 million farm and self-employed workers" and "does not take into account the 14.7 million workers" who are under-employed or off the unemployment rolls.
Yet the mandates laid out in the Chairman's own statements declare that the Federal Reserve's chief priority is "price stability"--i.e. inflation--not full employment. This is where macroeconomic fake reality separates itself from boots-on-the-ground real reality. Maybe someone should tell His Chiefness that if people don't have jobs or income, it won't matter a hill of beans if milk costs 50 cents more. The lines at the food banks are exploding: forty three million people have been added to food stamp programs since the Great Collapse. People need jobs to live. That is the REAL economy.
Economists state , "The consensus among policymakers today is that the full employment rate of unemployment is roughly 4.5%." The Fed's own unemployment number of 8.8% is nearly double that. Most observers know the real numbers are more than twice that. Why is there no inclusion in the fake reality numbers of the Federal Reserve of self-employed, freelance and small-medium business owners who are desperately seeking work, clients and customers?
After the Fed Chief glibly stated on nationally televised reality TV that hundreds of thousands of jobs were added to the payroll in April and unemployment numbers decreased substantially, news reports directly contradicted the Federal Reserve's carefully scripted stats.
Reuter's reported, "Hiring by small businesses almost ground to a halt in April after making gains in February and March, a survey published on Thursday showed...The National Federation of Independent Business said its survey of 1,985 businesses found that "twice as many owners released employees as increased employment' and the average number of net new jobs slipped to 0.04 from 0.17 per firm."
Twice as many employers fired, rather than hired? The Fed Chief must have missed that report.
No amount of macroeconomic theoretical statistics will change the fact that small business is laying off workers by the millions. Advantage, the small business magazine reports, "The business cycle is an important factor in the net creation or loss of jobs. In the current downturn, firms with fewer than 20 employees began losing jobs as early as the second quarter of 2007. From 2008 to the second quarter of 2009, these smallest firms accounted for 24 percent of the net job losses, while those with 20-499 employees accounted for 36 percent; the remaining 40 percent of job losses were in large firms with more than 500 employees." Small (1-100 employees) and medium-sized enterprises (101-499 employees) account for 60% of the nation's job market.