We can only hope Fed Chairman Ben Bernanke revised his speech Tuesday claiming the economy is showing “tentative signs” of improvement. At least President Obama in a major speech on the economy later in the day wasn’t caught with his pants on fire. More on that later.
In remarks prepared for students and faculty at Morehouse College in Atlanta, Bernanke mentioned improvements in recent data on home and auto sales, home building and consumer spending as flickering signs of encouragement.
In the newspaper business, an editor at this time would bark “Rewrite.”
It seems the Commerce and Labor departments scooped the fed chairman who should have known the reports were forthcoming.
Commerce reported a 1.1% retail sales drop in March with auto sales leading the slump.
The Labor Department followed with a report saying wholesale prices plunged 1.2% in March led by a 13.1% drop in the price of gasoline.
Bernanke did warn that any hope for a lasting recovery depends on the government’s success in stabilizing the financial markets and getting credit to flow more freely. That’s a familiar tune the Obama administration has played over and over.
The key economic indicators announced by Commerce and Labor were greeted with predictable thumbs down from the stock market. Stocks on the Dow Jones Industrial Averages dropped 85 points in early morning trading.
There’s more gloomy news. In a separate report, Commerce said business inventories fell 1.3%, the sixth straight month that’s occurred.
The overall economy, as measured by the gross domestic product, fell at an annual rate of 6.3 percent in the final quarter of last year, the biggest slide in a quarter-century led by the largest drop in consumer spending in 28 years.
The White House released an advanced text of Obama’s speech at Georgetown University in which he said “times are still tough” and warned that a culture of “instant gratification” had produced neglect of major national problems that wound up undermining the economy.
He chastised former President George Bush and the past and current Congress for failing to address the economic problems. He contended that the nation’s “day of reckoning” on the economy was caused partly by “a fundamental weakness in our political system.”
At least neither Bernanke nor Obama said what we’ve heard before — that the fundamentals of the economy are strong.
Here’s one excerpt from Obama’s prepared text:
I want every American to know that each action we take and each policy we pursue is driven by a larger vision of America’s future — a future where sustained economic growth creates good jobs and rising incomes; a future where prosperity is fueled not by excessive debt, reckless speculation and fleeing profit but is instead built by skilled, productive workers; by sound investments that will spread opportunity at home and allow this nation to lead the world in the technologies, innovations and discoveries that will shape the 21st century. That is the America I see.
Mr. President, we see that too. But the time has come to stop blaming the previous administration and the previous congress for all the ills passed on to your administration. We get that. The time has come to stop the talk and walk the walk.
Cross posted on The Remmers Report