Bernanke Speaks To Reporters After Fed Meeting

Nov 2, 2011
Originally published on November 2, 2011 3:40 pm
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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

GUY RAZ, HOST:

And I'm Guy Raz.

The Federal Reserve says the U.S. economy has strengthened a bit in recent months, but don't expect a hiring boom any time soon. Also, the unemployment rate is expected to remain high for years. Fed policymakers wrapped up a two-day meeting this afternoon without taking any extraordinary new actions to stimulate the economy. Afterward, Fed chairman Ben Bernanke spoke to reporters.

And NPR's Jim Zarroli is here to tell us what he said. Jim, the statement released by the Fed today is more optimistic than the last one in September. What is Bernanke seeing that makes him think things are picking up?

JIM ZARROLI, BYLINE: Yeah, he said, you know, household spending is up a bit, so is business investment. He has said before, a lot of the problems in the economy this spring were temporary things, like the Japanese earthquake and the aftermath of that. Now, they've receded, so things are picking up. But he was, long term, just more pessimistic than he has been. He says the labor market is a problem. It's not going to, you know, get better very soon.

RAZ: Jim, Bernanke himself, of course, has been a target of criticism this year over the course of the economy. Did he address that at all?

ZARROLI: Yeah. He was actually put on the defensive a lot. He was asked, you know, why things haven't improved more in the economy. He was asked about the growing levels of income inequality in the country, why that was happening. He said something which he has said before that basically the Fed can't do it all. That the other parts of the government - which I - presumably means Congress and the White House, need to take more active steps to create jobs. Here's what he had to say.

BEN BERNANKE: Certainly, we are doing our part to try to create more jobs and more opportunities in America. With respect to inequality, I think the best way to address inequality is to create jobs.

RAZ: Jim, we're, of course, seeing demonstrations against the financial system all across the country in a lot of cities. I understand that the Fed chairman actually weighed in on Occupy Wall Street.

ZARROLI: Yeah, he says he understands the sentiment behind the protests. The economy is very bad. He was asked about the fact that the - the protestors, a lot of them, expressed anger toward the Fed itself. There's a lot of unhappiness about the role that the Fed played in the 2008 bank bailout, which is still very unpopular. And Bernanke said there are a lot of misperceptions about the bailout. He said, a lot of people think it was about propping up salaries for bankers.

BERNANKE: That is obviously not the case. What we were doing was trying to protect the financial system in order to prevent a serious collapse of both the financial system and the American economy. We needed to take those steps. If we hadn't taken them, the consequences would have been dire.

ZARROLI: But, you know, it's just hard to prove that things would have been worse if the Fed hadn't acted. So, I think he's just resigned to the fact that the bank bailout is going to be misunderstood and it won't be, I guess, up to history to decide whether the right steps were taken.

RAZ: Finally, Jim, what about the bankruptcy earlier this week of the investment firm MF Global? This was one of the Fed's so-called primary dealers. Did that come up at all?

ZARROLI: Yeah, he was asked about that. He said the - he pointed out that the meltdown of MF Global had happened very fast, which is a sign that the firm was overleveraged. In other words, it had borrowed too much against its assets to do risky things. So, there were clearly some problems with the way it was being run. But he did say several times, you know, the firm was regulated by other agencies, not the Fed. So, he sort of deflected blame a bit.

RAZ: That's NPR's Jim Zarroli in New York. Jim, thanks.

ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.