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From bad to worse

08 Mar 2009 - Preaching the News for Sunday

In this Sunday's gospel a cloud casts a shadow out of which God speaks to Peter, James, and John as they witness the Transfiguration. Insurance giant American International Group, Inc.'s (AIG) staggering $61.7 billion loss in the last three months of 2008, which forced yet another huge government bailout of the crippled company, cast a dark shadow over financial markets and the prospects of economic recovery. Federal Reserve Chairman Ben Bernanke delivered a harsh rebuke to AIG on Capitol Hill Tuesday in a rare public expression of frustration over having to repeatedly bail it out. "I think if there's a single episode in this entire 18 months that has made me more angry, I can't think of one, than AIG," he said. Bernanke was responding to a question from Senator Ron Wyden (D-Ore.) in a committee hearing: "Mr. Chairman, at what point will the taxpayer no longer be on the hook for the massive AIG failure? What is the endgame for American taxpayers?" "I share your concern. I share your anger. It's a terrible situation," Bernanke responded. "But we're not doing this to bail out AIG or their shareholders, certainly. We're doing this to protect our financial system and to avoid a much more severe crisis in our global economy." This week's bad economic news also included reports that domestic auto sales dropped to their lowest level in 28 years, and that every state in the country with the exception of a band stretching from the Dakotas to Texas is now shedding jobs at a rapid pace. Even that swatch of the country has recently begun to suffer because of the sharp fall in both oil and crop prices. Unlike the last two recessions--earlier this decade and in the early 1990s--this one is causing much more job loss among the less educated than among college graduates, analysts report. The earlier recessions included large white-collar layoffs. The brunt of the layoffs this time is falling on construction workers, hotel workers, retail workers, and others without a four-year degree. Source: Articles by Brady Dennis for the Washington Post and Bill Vlasic, Nick Bunkley, and David Leonhardt for the New York Times

bailout recession american international group aig ben bernanke ron wyden automobile sales blue collar workers

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Can we bank on your support?

20 Dec 2009 - Preaching the News for Sunday

The infant in Elizabeth's womb "leaped for joy" when Mary approached, we hear in this Sunday's gospel. Small businesses that approach banks for loans are not getting a similar reaction. On Monday President Barack Obama told Wall Street bankers who were bailed out last year they have a moral obligation to make more loans. "One year ago--when many of these institutions were on the verge of collapse, a predicament largely of their own making, oftentimes because they failed to manage risk properly--we took difficult and, frankly, unpopular steps to pull them back from the brink," Obama said. Obama said that because taxpayers provided "extraordinary assistance" to save bankers from the financial crisis, "now that they're back on their feet, we expect an extraordinary commitment from them to rebuild our economy." Banks should not be required to make bad loans, the president said after meeting with executives of financial firms, but "I'm getting too many letters from small businesses who explain that they are credit worthy" but cannot get loans. In related news Federal Reserve Chairman Ben Bernanke was named Person of the Year by Time magazine this week. Time credited Bernanke with leadership that helped set the U.S. economy on a path to recovery, even if bank bailouts have proven unpopular. "Bernanke . . . knows the economy would be much, much worse if the Fed had not taken such extreme measures to stop the panic," Time said. Source: Articles by Henry J. Pulizzi for the Wall Street Journal, David Jackson for USA TODAY, Mark Felsenthal and Caren Bohan for Reuters, and the Associated Press

barack obama ben bernanke federal reserve small business banks loans bankers person of the year time magazine

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Don’t make a federal case of unemployment

01 May 2011 - Preaching the News for Sunday

This Sunday’s reading from the Acts of the Apostles describes how members of the earliest Christian community joyously devoted themselves to communal life, holding their possessions in common and granting to each according to need. The economic environment in modern-day America is a good deal harsher for those in need, with stubbornly high unemployment and rising fuel and food prices. U.S. Federal Reserve Chairman Ben Bernanke didn’t offer much solace Wednesday at the first-ever press conference by someone in his position. The labor market is “improving gradually,” Bernanke said, but the Fed is reluctant to try to do more to stimulate job creation. “It is not clear that we can get substantial improvements in payrolls without some additional inflation risk. “In my view, if we are going to have success in creating a long-run sustainable recovery with lots of job growth, we have to keep inflation under control.” The central bank interprets rising gas prices to be a simple problem of supply and demand, Bernanke said. “There’s not much that the Federal Reserve can do . . . per se.” A longtime advocate of greater Fed transparency, Bernanke said the idea of holding a press conference was a natural as the bank looks for ways to provide more information to the public, despite the risk of being misinterpreted. “It was our judgment after thinking about this for some time that at this point the additional benefits from more information, more transparency, [and] meeting the press directly outweighed some of these risks,” he said. An article by Jennifer Epstein for Politico.com

ben bernanke federal reserve employment jobs inflation

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