Baum on Money: Bernanke Talks on Talk
Greetings, all. Welcome to the midweek edition of what I'm reading on the U.S. economy.
Bernanke talks Fed communication
Fed Chairman Ben Bernanke gave a speech to the National Economics Club last night on the evolution of the Fed's communication policy. That's pretty much all Fed officials talk about these days. Bernanke stressed the importance of the public's expectations in making policy more effective; the Fed's role is to state clear objectives and the plans for achieving them. If there was a message for financial markets, it wasn't a new one: Interest rates are going to stay near zero for a very long time. At least that's what the Fed thinks, which may be different from reality. And that, my friends, is why communication will always be an imperfect policy tool.
What to look for in the Fed minutes
The minutes from the Fed's Oct. 29-30 meeting will be released at 2 p.m. today, and the Wall Street Journal's Jon Hilsenrath has some forward guidance for us. The minutes "could provide some clarity on how they might handle a debt ceiling crisis," since the October meeting was right after the 16-day government shutdown. Fiscal headwinds and uncertainty are big issues for the Fed, in and of themselves. Hilsenrath unearths a nugget from January, when the FOMC authorized the New York Fed to intervene in short-term funding markets "to address temporary and unusual disruptions, when instructed by the Fed chairman." Hilsenrath suspects the Fed has kept mum on the issue so as not to encourage Republicans to test the "temporary and unusual disruptions" powers and play chicken with the debt ceiling again.
Betterbut still not good enough
Health-care consultant Bob Laszewski updates us on week seven of the Obamacare rollout. Enrollment is up, error rates are down but both have a long way to go in order to handle the expected heavy volume in early December. Laszewski says his independent survey confirms what Henry Chao, Deputy Chief Information Officer at the Centers for Medicare and Medicaid, told Congress: that 30-40 percent of the IT systems to support Obamacare have yet to be built. Bottom line: the five million cancelled policies are well ahead of the number of enrolees.
The most unpleasant part of the day
Commuting, that is. Maybe you knew that already. Americans spend 56 million hours a year getting to and from work. The longer your commute, the less connected you are to political activities, according to an NPR report. (You can read the full study here). The study's authors found that "commuting leads to the greatest loss in political interest for low-income Americans," eroding their participation in civic activities. The folks who travel in chauffeured limos seem to survive the commute.
Be careful what you shoot at
Because it could be a robot deer, designed to foil illegal hunters. Robots can already vacuum your carpet, mow your lawn and perform dangerous missions in war zones. Now, with ear, tail and head movements controlled from 50 feet away, deer robots are being used to trap and nab poachers. As long as the robots don't eat my garden, I'm fine with it.
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