The annual Jackson Hole conference of the Federal Reserve starts today! If you’re a little under-enthusiastic, it’s OK. There’s a lot going on, what with the State Fair, back to school preparations, and the fact that hardly anyone cares what the Fed is up to.
Except, that is, more people all the time. The mysterious workings of the Fed have come under a lot of scrutiny lately – from left, right, and center. The most powerful bank in the world does indeed control more of our destiny than many otherwise free people would like, and that’s worrying.
The Fed knows this, of course. They also know that in an era of dysfunctional government and globalism they have more power all the time – as well as more responsibility to get it right. Will there be a new, more open Fed? The answer, a very strong “Yes!” may surprise you.
Your daddy’s rich / And your mamma’s good lookin’
So hush little baby / Don’t you cry
Summertime, from Porgy & Bess by George Gershwin
As the school year winds down, summer officially starts. You wouldn’t know it in the upper Midwest, where a cold rain has drizzled down nearly every day for the last month. Though a lot of crops didn’t make it into the field on time, it’s really summer. The thermometer might not say it, but the economic reports do.
Every year at this time there is a small recession, a general slowdown. It’s why so many financial advisers avoid stocks this time of the year. But wasn’t this year supposed to be different? It was. But it isn’t. And that has everyone scrambling to explain why things are looking a little bit blue.
They shouldn’t. This is normal – or normal amplified a bit by general uneasiness for the long haul.
This is the time of year to look back and reflect. What happened in 2012? A lot of things happened, and yet when we look at the political and economic situation it appears that almost nothing happened at all. About US 1.6M jobs were added during the year, but growth (change in GDP) remains at a near-recession 2% or less. Politically, the election produced the same President and Congress who remain mired in gridlock, currently unable to get out of the “Fiscal Cliff” trap of their own making. Europe has gone from bad to somewhat worse, proving that austerity isn’t going to help anyone.
What should we make of this year? Not much, really. There was not a big story in politics or economics that is worth re-hashing. But there is a small story that has not been told. Where did those 1.6M jobs come from, anyway?