"Mr. Chairman, I'm gonna start with a question that everyone wants me to ask: when does this end?" 60 Minutes correspondent Scott Pelley asked Bernanke.
"It depends a lot on the financial system," he replied. "The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis. We've seen some progress in the financial markets, absolutely. But until we get that stabilized and working normally, we're not gonna see recovery. But we do have a plan. We're working on it. And I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year. We'll see recovery beginning next year. And it will pick up steam over time."
Asked if he thinks the recession is going to end this year, Bernanke said, "In the sense that this decline will begin to moderate and we'll begin to see leveling off. We won't be back to full employment. But we will see, I hope, the end of these declines that have been so strong in a last couple of quarters."
"But you wouldn't say at this point that we're out of the woods?" Pelley asked.
"No," Bernanke replied. "I think the key issue is the banking system and the financial system."
--Fed Chairman Ben Bernanke interviewed by Scott Pelley on 60- Minutes (3.15.09)
I have for some time been an unapologetic supporter of the Fed chairman, Ben Bernanke. He appears to me the right man, with the right background, for this troubled season. And last night on 60-Minutes, he talked to Scott Pelley in a wide-ranging discussion on the state of the economy, the financial system, and what has to be done now. This is something chairmen of the Fed just don't do. If you haven't yet seen this, you really should. (Just click the link and click the video.)
Why invite an interview now? Because it is so very important for all Americans to get past their understandable resentment and anger at all the money that the US must spend to restore some of these undeserving financial institutions to health--whether through lending or buying "toxic" assets, whether by borrowing itself, "printing" money, or providing lines of credit. And, yes, it will be this and the next generation of Americans who will bear the cost and effects of both the original financial failures and the necessary government financing to restore them.
Nonetheless, we must also understand that, as Bernanke assures us, we came "very close" to falling into a financial depression at the time the first traunch of TARP funds were lent to financial institutions--and only that TARP lending and other Treasury programs allowed us to avert it. A failure now to continue the necessary refinancing of the country's financial system will most likely mean that our financial condition will get much worse for much longer with worse implications for us and our children. And our attention must not be diverted by troubling issues like the merits of AIG bonuses (payable, it turns out, under the terms of binding performance contracts, wisely written or not).
You could say Bernanke is carrying water for Obama and the administration's program. If that is true--and it likely is--he takes on that role only to the extent that he believes in the correctness and importance of it. Ben Bernake isn't owned by Wall Street or the White House. Rather, he appears to me animated and inspired principally by the opportunity to serve his country, and by is his steady, independent commitment to use all his estimable knowledge and experience to help lead it through this frightening time. He joins the short list of critical leaders we must count on, and he appears to me worthy of our trust and high expectations.
http://www.cbsnews.com/stories/2009/03/12/60minutes/main4862191.shtml
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