Two Associated Press reports from this afternoon, one from Stephen Bernard and another much lengthier piece from Jeannine Aversa, attempt to set the template for Friday morning's reportage: Despite all the bad news, including a serious downward revision to second-quarter economic growth, it's up to Big Ben Bernanke to calm everyone down, and magically return the economy to some kind of even keel.
No pressure there, big guy.
Aversa's earlier report lays it on especially thick:
Bernanke's top tool now may be power of persuasion
The economy appears to be stalling. Yet the Federal Reserve has run out of simple steps it can take to revive it.
That's the test facing Fed Chairman Ben Bernanke as he addresses a conference Friday in Jackson Hole, Wyo. Without any easy options left, Bernanke must try to prevent another recession by persuading people and businesses to feel confident enough about the future to spend more today.
Weak consumer spending and a scarcity of jobs have put the economy at risk of lapsing into another downturn. Short-term interest rates near zero have yet to rejuvenate the economy. The benefits of federal stimulus programs are fading, and Congress has declined to pass any major new economic aid.
That puts increasing weight on Bernanke's words. The Fed chairman will speak at 10 a.m. EDT (8 a.m. local time), less than two hours after the government spells out just how fragile the economy is. The Commerce Department is expected to report the economy grew at an anemic annual rate of 1.4 percent from April to June. Growth in the current quarter is shaping up to be just as weak.
Bernanke's task isn't confined to restoring public confidence. Equally vital, he must forge consensus within the fractious Fed itself. Some Fed officials have been reluctant to have the central bank invest more money than it already has to try to stimulate borrowing and spending.
How can the Fed's almost out-of-gas monetary policy and one speech by the guy who runs it save us, when it's the people who are in charge of fiscal policy who have brought the economy to this awful juncture? Incredibly, the names of Barack Obama, Nancy Pelosi, and Harry Reid do not appear anywhere in Aversa's report. It's as if they're just in the stands, no more or less important than the rest of us, waiting to see what kind of rabbit Big Ben might pull out of his hat.
Aversa also writes:
... at the heart of Bernanke's challenge: How to persuade individuals and companies to feel good enough about their financial futures to buy homes and cars, expand payrolls and resuscitate the recovery? Beyond the rate-cutting and other actions Bernanke's Fed already has taken, few strong ideas have emerged for what else the Fed should be doing.
Again, why is this all being dumped on supposedly broad-shouldered Ben? He didn't create the pervasive atmosphere of economic uncertainty that's has sent businesspeople, entrepreneurs, investors, and consumers cautiously scurrying to the sidelines. Pelosi, Obama, and Reid did that, and continue to.
Ben Bernanke hasn't been a one-man wrecking crew attacking the employment market. On Wednesday, Michelle Malkin chronicled how Barack Obama has been that man.
Ben Bernanke isn't the guy who will be responsible for massive tax hikes that will kick in on January 1 unless Congress does something and the President signs off on it. That's Nancy Pelosi's and Harry Reid's problem.
Ben Bernanke isn't the guy spending money like crazy. Barack Obama's government, with support of Pelosi, Reid, and the Democratic Congress, is doing that.
The later report from the AP's Bernard ("Stocks slip as caution about the economy returns") covered another down day in the stock market, which in this case saw the Dow close below 10,000. The AP reporter covered all kinds of things influencing the market: home sales (actually the lack thereof for both new and existing homes), weekly initial unemployment claims (which did at least fall this week on a seasonally adjusted basis after going mostly the other way during previous weeks), and, of course Bernanke's upcoming speech. Tomorrow's GDP report? He didn't even mention it, nor did he bring up the names of Obama, Pelosi, or Reid.
Beside's AP's annualized +1.4% estimate above, here are some other predictions of what Friday morning's GDP report might bring:
- At the Wall Street Journal -- "Economists expect to see the initial estimate of 2.4% growth cut to a more modest 1.3% gain."
- Reuters expects GDP to "be revised lower to an annual pace of 1.4 percent."
- Zero Hedge cites sources who believe it's going to be in the neighborhood of below 1% to maybe +1.2%.
- As noted by Jeff Poor at NewsBusters, Jumpin' Jim Cramer is predicting +0.5% and a "mass panic" in the markets.
At the UK Guardian, Katie Allen is also singing from the "It's All Up to Ben" hymnal ("Ben Bernanke under pressure to prop up US economic recovery"). Again, it's as if Obama, Pelosi, and Reid, who are again not mentioned, don't exist.
Are they really going to try to pin the economic malaise on Ben Bernanke if he isn't the second coming of Winston Churchill tomorrow? They can't be serious, they're certainly not credible, and although stranger things have happened, it's hard to see how it can work.
Cross-posted at BizzyBlog.com.