It does not take a genius to understand why consumer spending is weak.
1. Unemployment rate is 9%
2. Real wages are falling
3. Income advances go to the wealthy
4. Middle class is shrinking
5. Jobs hard to find
6. Approval ratings of Congress and Obama at record lows
7. Consumers have high debt ratios
8. Home prices are still falling
9. Homeowners are trapped in their homes, unable to refinance
10. Boomers need to save for retirement
However, those simple facts are far too complicated for a PhD like Fed chairman Ben Bernanke to figure out.
Please consider Bernanke puzzled by weak consumer spending
Federal Reserve Chairman Ben Bernanke says he is surprised by how cautious consumers have been in the two years since the recession officially ended. But the Fed chief offered no hints of any steps the Fed would take to boost the weak economy.
Bernanke says a number of factors are keeping consumers from spending more, including high unemployment, a temporary spike in energy prices, falling home prices and high debt burdens.
Bernanke said the Fed will consider range of policy options at its next meeting later this month without offering any clues to what it might do. His comments were familiar to ones he gave last month in Jackson Hole, Wyo.
Note that Bernanke even cited some of the 10 factors I mentioned, yet he is still surprised. What a dunce.
Is it any wonder his policies are so counterproductive when he cannot figure out simple things the average person can see clearly?
U.S. 30-year mortgage rates are at record lows but it does not matter. Too few want to buy and many cannot refinance because they are underwater.