THOSE NUTTY ECONOMIC PESSIMISTS

The economy is struggling, and Ben Bernanke thinks it's your fault, Gloomy Gus:

Ben S. Bernanke, the Federal Reserve chairman, offered a new twist on a familiar subject Thursday, revisiting the question of why growth continues to fall short of hopes and expectations.

Mr. Bernanke, speaking at a luncheon in Minneapolis, offered the standard explanations, including the absence of home construction and the deep and lingering pain inflicted by financial crises. He warned again that reductions in government spending amount to reductions in short-term growth.

Then he said something new: Consumers are depressed beyond reason or expectation.

Oh, sure, there are reasons to be depressed, and the Fed chairman rattled them off: "The persistently high level of unemployment, slow gains in wages for those who remain employed, falling house prices, and debt burdens that remain high."

However, Mr. Bernanke continued, "Even taking into account the many financial pressures that they face, households seem exceptionally cautious."

Consumers, in other words, are behaving as if the economy is even worse than it actually is....

We're not behaving as if the economy is worse than it actually is. We're behaving as if the likelihood of recovering from a setback is much worse than it's ever been, at least in our lifetime -- which is an appropriate reaction to contemporary reality.

If you're fiftysomething, for instance, and you lose a full-time job, what are the odds you'll get another one -- ever? If you're any age and lose a good job, what are the odds your next job, whenever you finally get it, will pay as much as your old one? Even if you have equity in your home and have a 401(k) and have some sort of nest egg to tide you over a rough patch and have maintained a good work record and seemingly marketable skills and you keep yourself in good health, you can be knocked off your feet so easily -- and we're all being told not to be expect to be helped back on our feet, by both capitalists (we don't need no stinking American employees) and politicians (your entitlements need to be delayed, or maybe the whole country needs to be weaned off them altogether), while our old expectations of what we have to do in life so we have a reasonable chance of getting ourselves back on our feet after a setback no longer seem to apply.

So of course we're cautious, you idiot.