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In a Congressional hearing this morning, Ben Bernanke testified before the Joint Economic Committee.  Bernie Sanders brought up #OccupyWallStreet in a broader converstation about the economy, regulations and income inequality.  

Today, Federal Reserve Chairman Ben Bernanke testified before Congress and presented his agency's report on monetary policy.

Bernanke was in front of  the Joint Economic Committee to offer his outlook on the state of the economy, governmental financial policy, and federal spending priorities.

Senator Sanders' office released this segment of video.  I have also linked the C-SPAN video of the entire hearing.  No transcript is available yet that I know of.

Update 1: Sorry that the original video that Sen. Sanders posted to YouTube was removed.  I assume it was replaced with this one that I have substituted. This one has the same segment as the original but is longer by about one minute and includes more conversation about the protests with another member of the committee, Rep. Burgess, a Tea Party Republican.  I will update the transcript shortly.

Update 2: Transcript is updated to match the new, longer substituted video from Sen. Sanders' office.


Senator Sanders: Mr. Chairman, as you know, there are people demonstrating against Wall Street in New York city and other cities around the country and I think the perception on the part of these demonstrators and millions of other Americans is that as a result of the greed, the recklessness and the illegal behavior on Wall Street we were plunged into this horrendous recession we're currently in.  Do you agree with that assessment?  Did Wall Street 's greed and recklessness cause this recession that led to so many people losing their jobs?

Ben Bernanke:  It had a... excessive risk taking on Wall Street had a lot to do with it and so did some failures on the part of regulators.

Senator Sanders: Do you believe that we have made any significant progress since the collapse of Wall Street to suggest that we will not either in the short term or in the longer term once again see a collapse on Wall Street and the necessity of a bail out?

Ben Bernanke: Senator, yes, we are making substantial progress although I would point out that many of the rules, implementing, as you pointed out yourself, many of the rules implementing Dodd-Frank are not yet enforced or fully implemented but I believe that as this process goes forward that we will have made a very substantial improvement, yes.

Senator Sanders: Well I would respectfully disagree.

[ ... ]

Rep. (Dr.) Burgess: You see protests both on the right and the left. Right now the protests that are getting the headlines are on the left in New York.  What is that protest saying to you? What are you hearing from that activity in New York right now?

Ben Bernanke:  Well I would just say very generally I think people are unhappy with the state of the economy and what's happening.  They blame with some justification the problems in the financial sector for getting us into this mess and they are dissatisfied with the policy response here in Washington and at some level I can't blame them.  Certainly nine percent unemployment and very slow growth is not a good situation. That's what they are protesting.

Rep. (Dr.) Burgess:  And are you incorporating that into the remedies that you are proposing?

Ben Bernanke: I'm taking into account the growth rate and the unemployment rate as well as the inflation rate.  I'm not taking the protests into account specifically but I certainly, like everyone else, am dissatisfied with what the economy is doing right now.

[ Transcript by joanneleon.  Any transcript errors are mine.]

In this segment, Sanders and Bernanke discuss income inequality and Sanders asks Bernanke why the Fed does not provide low interest loans to small businesses in the same way that they do for the large banking institutions.

In a later part of the conversation, Sanders cites a specific clause in the Federal Reserve Act that says that the Fed can, in extraordinary circumstances, lend to any business.  Bernanke then makes an excuse about not being able to assess the credit worthiness of smaller companies and suggests that Congress should do it.  Sanders leaves the subject asking Bernanke to please consider it given that real unemployment is 16% and that the situation is dire.

In this C-SPAN video of the entire hearing, the Sanders/Bernanke conversation begins around the 42 minute mark  of the hearing and another conversation is around the 1:39 mark.

The Guardian reports that #OccupyWallStreet was also addressed in a different part of the hearing.

Bernanke was asked about the Occupy Wall Street protests, now in their third week in New York and spreading across the US. "I would just say that very generally people are quite unhappy about the state of the economy," said Bernanke, and with "some justification".

"At some level I can't blame them. Nine percent unemployment and slow growth is not a good situation," he said.

The Guardian article addresses the broader gist of the testimony which is pretty disturbing.

Bernanke says US economy is 'close to faltering'
Fed chairman blames euro crisis, uncertainty over jobs market and political battles in Washington for gloomy economic outlook

Federal reserve chairman Ben Bernanke has warned that US economic recovery is "close to faltering", and that a "disorderly" default in the Greek debt would have a serious impact.

In testimony to Congress, Bernanke was repeatedly quizzed about the impact of the European crisis on America. He said the US was an "innocent bystander" in the eurozone debt standoff and that US banks were not heavily exposed to Europe's most troubled economies.

[ ... ]

Bernanke also warned that political warfare in Washington was a threat to the US economy. He told the Joint Economic committee that the recent row over raising the debt ceiling had been very unhelpful at a time of increasing economic uncertainty. "It's no way to run a railroad," he said.

Bernanke also talked about "The Twist" and the outlook for the job market.  I'm not sure exactly what "faltering" means in Bernanke-speak.  Is that a Depression?

Bernanke says Twist equals half-point rate cut
WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke Tuesday said the central bank’s new policy of swapping bonds is not a “game-changer” but should help the economy avoid a new downturn.

“We think this is a meaningful, but not an enormous support to the economy,” Bernanke told a congressional committee Tuesday.

[ ... ]

“It should help somewhat on job creation and growth. It is particularly important now that the recovery is close to faltering,” he said.

[ ... ]

Bernanke wasn’t optimistic about the outlook. He said a close reading of recent economic data doesn’t show any hint of improvement ahead for the weak U.S. labor market.

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