Ben Bernanke defends Fed's impact on job creation

By: Stephanie Condon
Topics: Economy

Democrats and their supporters have been crying out about Washington's lack of job creation, while Republicans are also concerned about blowing up the government's balance sheets.

In his first-ever public news conference, Federal Reserve Chairman Ben Bernanke revealed how the Fed has walked a fine line between both concerns.

The Federal Reserve announced today that it is on track to end its Treasury-bond-buying program -- a program intended to stimulate the economy and create jobs but that received serious blowback from Republican politicians concerned about inflation.

Bernanke danced around tough questions today about why job creation has been so slow.

"We've made a lot of progress," Bernanke insisted, even as he acknowledged that there are still 7 million fewer jobs than before the economic crisis. He said the Fed went to "extraordinary measures" to try to create jobs with its security purchases. But, he added, "We were very clear this was not going to be a panacea and was only going to turn the economy in the right direction."

That's unlikely to appease those who represent the labor force, like the AFL-CIO, which has kept the Fed on the hot seat, insisting on "keeping the agenda focused where it should be--on creating jobs, investing in America's future and rebuilding our middle class."

Bernanke explained that the Fed is ending the program because of inflationary pressures.

"Why not do more? The trade offs are getting less attractive at this point," Bernanke said. "It's not clear we can get substantial improvement in payrolls without some inflation risk... We've got to keep inflation under control."

That move could appease Republicans who at a House Budget Committee hearing in February decried the program. The Associated Press reported at the time that Rep. Paul Ryan (R-Wis.), head of the committee, said he was worried the Fed wouldn't be able to detect inflation until "the cow is out of the barn" and was already spreading dangerously through the economy.

Even as he defended the Fed's concerns about inflation, Bernanke said that the current inflation rate isn't a concern. For now, the Fed will reinvest its bond holdings, keeping interest rates low, but will tighten its interest rate policy eventually, depending on inflation and economic growth.

Stephanie Condon
Stephanie Condon is a political reporter for CBSNews.com.
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by crazyname April 28, 2011 2:22 PM EDT: Our economy is terrible, forcasts are 75% lower than projected, and nobody is going to want to buy our debt. The only ones with money are stocks, banks personal pension funds. Watch out people, Your IRA"s and 401k's are going to be taken to buy this junk! got to keep the dems in spending money, and Barry in vacation cash! Also we have to pay his way to get re-election money form the saps that either believe his lies, or have something to gain from his re-election. We the taxpayers have seen no gain that is for sure!; Reply to this comment


by slatep April 28, 2011 12:14 PM EDT: There is no defense for these sleazebags.!!!; Reply to this comment


by sjc_1 April 28, 2011 4:11 AM EDT: We have about 10 million jobs that are not coming back. Even if we create 2 million jobs each year, it will be more than 6 years before we begin to catch up, as more graduates look for jobs each year.; Reply to this comment


by slatep April 28, 2011 2:34 AM EDT: Of course Bernanke defends the Federal Reserve.

He is one of the highest mucky-mucks employed there.

Because of it's title; the FEDERAL RESERVE; many people think this is a government institution.

BAD NEWS.! It isn't.

It answers to no one.

Not to the President, not to Congress and not to the American people.

It is a group of extremely wealthy bankers and others; many of whom are not even Americans.

These are the very people responsible for our current economic crisis.!!

Their solution to this crisis is to print more and more money; further de-valuing the $ and driving the entire country into poverty and Socialism giving them even more control of America and it's people.

As Americans, we should band together and sue the Federal Reserve, Fannie Mae, Freddie Mac, Wall Street and all the corrupt banks and demand they give us our money back.!!; Reply to this comment


by gruven13777 April 27, 2011 10:07 PM EDT: More lies and spin as usual. The value of the dollar is plummeting off the edge of a cliff, and as a result, commodity prices are going through the roof again. Silver $50 an ounce, Gold $1500 an ounce, Platinum $1850 an ounce, Oil $115 a barrel, Grain Futures are sky high...etc.

But hey, according to the Bernank, inflation is not happening and is not a threat. lol; Reply to this comment


by wfw3536 April 27, 2011 9:07 PM EDT: Bernanke's one of the folks who had his eyes closed when the banks were ripping off folks. The other guy was Tim G, our secretary of treasury who was in charge of the fed in New York. It is a wonder our economy stinks and we are becoming a second rate economy who must bow to China and beg them for more and more money to borrow.; Reply to this comment

by AlFranken April 27, 2011 6:53 PM EDT

By not investing in our infrastructure we are actually costing us billions in international business --- our international airports are dumps compared to other countries. When corporate CEO's from other countries are invited to our country to consider investing in our country, the first thing they see and feel is our dumpy airport and thrashed highways. So, why shouldn't they look down at us like we are another 3rd world country?

China's infrastructure blows ours away.

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by AlFranken April 27, 2011 11:24 PM EDT: Actually, you are dead wrong. See how much it costs to hire a residential framer in the U.S. today and compare it to how much you would have to pay for a stone mason, crane operator, ... in China and you will be very surprised of how cheap it is to build in the U.S.

Actually, it is the cost of insurance, interest on the loan, city permits,... , environmental impact reports, ... is what is so expensive to build in the U.S..

In 2002, you could hire peasants to do general labor in central China for about 10 yuan per day. That comes out to about $1.15.

But for 10 yuan, you can buy a taxi for 3, shower for 4, and eat a meal for a family for the rest. Yes --- that is pretty low pay

You can hire a Mexican to frame for about $30 per day in Southern California -- What can you buy for $30?

Taxi -- min. in LA is about $20.00, McDonalds for one person. min, $5.00, Shower --- forget it.

So, take the bus to work and back -- $5.00?

Now in Shanghai and Shenzhen, that is a different story --- apparently, they are making enough to drive their own cars as far as can tell. I see some taking the bus. They don't need health insurance because it is so cheap. You have to share your room with others and it is sort of like M*A*S*H when you go but I've never spent more than 200 yuan and they have always been nice and cured my illness. --- That's not bad.

The food --- well forget that. They eat all the fresh vegetable and meat they can eat for about 10 to 15 yuan per person. I'm a big man and I can about 30 yuan of quality food that would run about $60.00 in the U.S. So 30 yuan is about $5.00. So it is about 6 times more expensive to eat in the U.S. ( I have to admit I don't get steak and pizza -- I do miss that).

So, to say that they work for a $1.00 is very much a stretch. Believe it or not, they have a pretty good quality of life -- not the same as yours but pretty good. Their unemployment rate in construction right now is is less than 1%. Ours is over 40% -- So that makes a big difference to.