Sad Commentary

The Lehmann Letter (SM)

Yesterday the Fed released the minutes for its most recent Federal Open Market Committee meeting:

http://www.federalreserve.gov/newsevents/press/monetary/20120711b.htm

They elicited a sad commentary in an article in this morning’s New York Times:

“Fed Is Torn on Tipping Point for Action”

http://www.nytimes.com/2012/07/12/business/economy/federal-reserve-officials-show-disappointment-with-growth.html?_r=1&ref=todayspaper

The article begins:

“Federal Reserve officials agreed at a meeting in June that unemployment would remain elevated for another five to six years, but most did not regard that as reason enough to expand the Fed’s efforts to stimulate growth, according to an official account published on Wednesday.

“The American economy is stuck in a new kind of normal, somewhere between crisis and prosperity, and economic policy makers are struggling to define their role. The Fed, which has responded forcefully each time the economy tips back toward recession, remains divided over whether it should try with similar urgency to return the economy to prosperity.”

To repeat: The new normal is five/six years of above-normal unemployment.

That’s a sad commentary.

(Summer season: The Lehmann Letter will be in summer-vacation form during July and August.)

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© 2012 Michael B. Lehmann