What Did Ben Say?

++If you want to read a piece on what is the biggest drag on the economy, check out Dana Millbank in the Post this morning. It's Congress.

++What did Ben Bernacke say yesterday? Interest rates will stay low through 2016. There would be a gradual taping of the FED's stimulus package but the FED would still use all its tools to stabilize growth in the economy. Asked why the employment situation wasn't better, he responded by saying the biggest problem was the fiscal policy of the government or the Congress. 

++As I have argued in this blog many times,if Congress had passed a jobs bill and infrastructure spending, we would be close to full employment. Remember the recent budget passed was $200 billion less than the President had asked for. What Bernancke argued yesterday was that in normal recessions in the past the government has added on the average 400,000 employees but since 2009 it has cut 600,000, which means a total of 1 million jobs have been missing in this recession.

++What Bernancke did yesterday was give Janet Yellin a Christmas gift by beginning the tapering without here having to take the heat the first time out. He also blasted libertarians for their views on the FED and pointed out that the FED gave the Treasury $300 billion from their profits. He also pooh-poohed the idea that the Fed was never audited.

++Wall Street reacted with relief. Home Construction hit a five year high and other indicators saw the economy growing at about 3%. I guess the main story was that few on the Fed boards indicated any desire or need to raise the interest rates. If you remember the Fed had been more split on this last year. But now only 2 of the boards favor raising interest rates so Bernancke was safe in saying there would be none for the foreseeable future.

++Businessweek reports that the GOP staff in the House wants nothing to do with a debt ceiling fight and that Paul Ryan was just playing games. We will see.