It Ain’t Over until the Eagle Grins

Paul Krugman’s column in yesterday’s NY Times talked about the economic outlook report released by the Federal Reserve’s monetary policy ‘deciders’, the Open Market Committee.  He’s been obsessing on one little sentence.

But my eye was caught by the following chilling passage (yes, things are so bad that the summarized musings of central bankers can keep you up at night): “All participants anticipated that unemployment would remain substantially above its longer-run sustainable rate at the end of 2011, even absent further economic shocks; a few indicated that more than five to six years would be needed for the economy to converge to a longer-run path characterized by sustainable rates of output growth and unemployment and by an appropriate rate of inflation.”

I used to participate every so often  in the gleaning of the data for the Atlanta Fed’s report back in my days which were back in Greenspan’s days at the Fed.  (Bill was President and all was well in the world, so completely different environment than now.)  It’s a rather interesting exercise that combines the sweat of wonky economists dropping numbers into black boxes and anecdotal evidence gathered by holding meetings with business folk out in meeting rooms to gauge what’s going on in reality-based USA.  The anecdotes  we try to catch are things like: Are you hiring?  Are you buying inventory?  Are you expanding your business?  What are your customers saying?  How happy is every one in your city?  You just basically chat them up after you’ve plied them with food and booze. We used to have the meetings at the Gulf Coast Casinos.  I’m not sure what the other Feds do, but I’m sure I’d love to be around for some of them as the ones down here could be pretty interesting.

Each of the Fed Banks print their assessment of the economy.  Some stick to their regions.  Some have particular interests.  For example, the St. Louis Fed is considered to be the center of the monetary policy wonks.  San Francisco Fed tends to focus on issues dealing with the Pacific Rim.  You can visit each of the sites and get a feeling for not only the country’s outlook, but the area where you live.

Read the rest of this entry »