In the immortal words of the Jackson 5: "I'll Be There" seems to be the meme du jour - which appears to us to be the same message that Bernanke (and his proxy Hilsenrath) have been on for a few years now. However, in case you hadn't had enough sycophantic central-bank-fellating 'hope', the WSJ's front-man just reiterated for one and all that Ben's our man. In our subtle opinion, it seems however that perhaps Bernanke was a little disingenuous with his talk of 'policy tool effectiveness' - as clearly his efforts have not had the desired economic effect so far (or he would not need to reiterate the ability to do more of the same).
Federal Reserve Chairman Ben Bernanke offered a robust defense of the effectiveness of the central bank's easy-money policies in his Friday speech at the Fed conference in Jackson Hole, Wyo., and left little doubt that he is looking toward doing more to give the economy a lift at the Fed's next policy meeting in September.
On The Economy [ZH - clearly helping the "it's still dismal out there" meme - let's hope it doesn't get better anytime soon, or he will really have to show how bad we are]:
Some market participants have been wondering if a run of moderately better economic data of late has changed the Fed's thinking about the economy. Mr. Bernanke left little doubt that he is still deeply dissatisfied with the outlook, describing the economic situation as "far from satisfactory."
[It's Cyclical Stupid]
Importantly, the Fed chairman also says that the job market's weakness, to date at least, is the result of cyclical problems in the economy (that is, a lack of demand) and not structural problems (such as a mismatch between the skills people have and the skills employers are looking for.)
[which means we are justified in our 'extreme' actions]
The Fed feels it can help address cyclical problems, but not structural problems. In other words, this is a problem where the Fed feels it can help. Of course, he also includes his "no panacea" caveat; Mr. Bernanke would love fiscal policy makers to take actions to support the economy and address long-run deficits. But he doesn't seem to see that as justification for inaction on his front.
[and the disingenuous comments begin... jobs, here's your jobs - what are you all complaining about?]
COSTS AND BENEFITS: Mr. Bernanke has said repeatedly that the Fed's decisions about how to use monetary policy depends on an analysis of the costs and benefits of different actions. His analysis, particularly of the Fed's controversial bond-buying programs, heavily emphasizes the benefits and plays down the costs. Two rounds of bond buying have raised overall economic output by 3%, he said, and increased payroll employment by 2 million jobs, he said his staff has estimated.
"A balanced reading of the evidence supports the conclusion that central bank securities purchases have provided meaningful support to the economic recovery while mitigating deflationary risks,"
[and finally - they have it all under control, so don't worry]
"The costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out further use of such policies if economic conditions warrant,"