Oct. 29--The scene: A Senate hearing room. The witness: Janet Yellen, chair of the Federal Reserve System board of governors.
Chairwoman Yellen, thank you for joining us today to explain the Fed's monetary policy. I've been going over reports from this little fraternity you lead. These rates are terrible. Zero-point-zero?
"The Fed's interest rate? Yes, Senator, in the range of 0.0 to 0.25."
Flat, shrunk and stupid is no way for an economy to grow. We're coming up on seven years of record low rates.
"It's a little below par."
It's more than a little below par. It stinks! The Fed was going to encourage borrowing and spending during the recession. The recession ended in mid-2009, yet here we are.
"We were really hoping that the midterm elections would improve things. But then the Greek system ... (Laughs uneasily.) Now we have to worry about China too. But we might be able to raise rates as early as December."
Laugh all you want because you and your committee have been on double secret probation all year.
"Double secret probation?"
One more lackluster quarter, and this economy has had it. You can't just keep propping it up forever.
"The issue here is not whether the Federal Reserve, on my watch and that of my predecessor, has taken extraordinary measures to keep prices stable and boost employment. It has. (Winks.) But I put it to you, Senator, if we're to condemn the Fed for keeping money loose, making it easier to borrow money for things like homes, cars and bridge loans in corporate mergers, then aren't we also indicting the American Dream?"
Wha?
"Well, you can say what you want about the Fed, but I will not have you bad-mouth the American Dream." (Begins humming "The Star-Spangled Banner.")
Are you quite through?
"What happened to the Congress I used to know? Where's the spirit? Where's the guts? Where's the belief in American exceptionalism and that whatever we do is always the right thing to do? We could be on the brink of another great economic era, but you're all convinced it's going to be the worst. 'Ooh, we're afraid to go along with the Fed because we might get in trouble with our political base.' Well, you can just kiss my ..."
Look, half the nation is still mad the government didn't keep the banks and Wall Street in check, and that we had to bail them out. The rest is mad that there's too much regulation of banks and Wall Street, and the way we bailed them out. Never mind that this recovery has been slow to reach all but the wealthiest people.
"You can't spend your whole life worrying about mistakes. They messed up. They trusted us. We'll tell them you were doing a great job taking care of the economy until one day you woke up and all the money was gone. But you won't let that happen ever again, and the recovery is moving along."
But is it supposed to be this soft?
"If you're not even going to try to let me help ..."
The time has come for someone to put his foot down, and that foot is me.
"When the Fed Open Market Committee sees further improvement in the labor market and becomes reasonably confident inflation will return to its 2 percent objective over the medium term, we expect to up the rate."
December then?
"Maybe, but no one wants to see six years of recovery down the drain."
We're just tired of the waiting game and want it over.
"Over? Did you say 'over'? Nothing is over until we decide it is! Was it over when the Germans ..."
Don't you dare give me the Germans speech. It's become a cliche. You're excused, Ms. Yellen.
"Thank you, Senator Blutarsky."
Margin call: It was 35 years ago Saturday, according to IMDB, that the movie "Deltagjengen" made its Norwegian debut in Oslo. The film had opened in the United States 27 months earlier under its original title: "National Lampoon's Animal House."
philrosenthal@tribpub.com
