The Chairman of the Federal Reserve Ben Bernanke says until the U.S. economic system is completely stabilized, the country will be slow to climb completely out of its latest recession and that could mean high unemployment rates for a few more years. A native of Dillon, Bernanke made the remarks during a rare interview on CBS’ “60 Minutes,” which aired Sunday night.
The nation’s unemployment rate is 9.8 percent. South Carolina”s unemployment rate stands at 10.2 percent. Bernanke says what concerns him now is the length of time many America’s have been out of the workforce.
More than forty percent of the unemployed have been unemployed for six months or more, and that’s unusually high. And people who are unemployed for such a long time, their skills erode, their attachment to the labor force diminishes, and it may be a very, very long time before they find themselves back in a normal working position.
Despite the fact that the economy is experiencing some growth and the major banks are building profits, Bernanke says many small businesses across the country are finding it hard to obtain loans for several reasons. Bernanke is stepping up his defense of the Fed’s $600 billion Treasury bond-purchase plan, saying the economy is still struggling to become “self-sustaining” without government help.
Bernanke says financial insititutions are taking a more cautious approach to lending than they did prior to the recession.
We want them to take risks, but not excessive risks. We want to go for a happy medium. I think banks are back in the business of lending, but they have not yet come back to the level of confidence–overconfidence–that they had prior to the crisis. We want to have an appropriate balance.
Bernanke also argued that Congress shouldn’t cut spending or boost taxes given how fragile the economy remains.