Fed chair Jerome Powell is starting to sound eerily like Ben Bernanke circa 2010:
“The expansion is still far from complete,” Mr. Powell said in remarks to be delivered at a virtual economics conference Tuesday. “At this early stage, I would argue that the risks of policy intervention are still asymmetric. Too little support would lead to a weak recovery, creating unnecessary hardship.” By contrast, the risks of providing too generous relief are smaller, he said. “Even if policy actions ultimately prove to be greater than needed, they will not go to waste,” he said.
In plain English, Powell is saying that Congress needs to pass a huge spending and relief bill. It would help the recovery and make life better for millions of people. And if the spending turns out to be bigger than we needed? It’s not a big deal.
Bernanke said much the same thing, in increasingly dire terms, during the recovery from the Great Recession, but his pleas fell on deaf ears. President Obama managed to pass a piecemeal “second stimulus” in late 2010, but that was all that Republicans ever allowed even though Bernanke persistently warned that it wasn’t enough.
Today, of course, there’s a stimulus bill all ready to go, but Republicans are stalling because it’s a few hundred billion dollars bigger than they’d like. Powell is trying to tell them not to worry about that, and instead to just pass the damn thing. So far, it’s not working:
Those pushing hard for a bill include the White House. Mr. Trump tweeted from the hospital on Saturday that the country “wants and needs” more stimulus. For Mr. Trump, a deal would serve as a sign of his authority, taking attention away from his health and unfavorable polls.
Congressional leaders, though, are still haggling. When asked Sunday whether Mr. Trump’s comments meant the two parties were closer to a deal, Ms. Pelosi demurred: “No, it means that we want to see that they will agree on what we need to do to crush the virus so that we can open the economy and open our schools safely.”
Republicans are “haggling” over a $2.2 trillion bill that they want to reduce to $1.6 trillion. This is beyond ridiculous. Democrats want more than that. Trump wants more than that. The Fed chair wants more than that. The country needs more than that. What on earth are they afraid of?