Besides the threat on Big Bird’s life, all I can remember from last week’s presidential debate is the bickering over whose jobs package is bigger. The economy was always going to be the central issue of this campaign, so you’d think both Romney and Obama would have prepared clearer policies than “I’ll add more natural gas jobs than the other guy.” There’s little more substance than that on either of the campaigns‘ official websites. Even an NPR analysis of the candidates’ plans resorts to close readings of stump speeches and campaign ads.
Why hasn’t the economy grown faster since the big crash in 2008, and how can it now? That’s as much the job of Ben Bernanke, chairman of the Federal Reserve Bank, as the president’s. A scholar of the Great Depression, Bernanke had the Fed prevent inflation risked by the bailouts Bush and Obama approved so the economy wouldn’t crash like it did 80 years prior. While the record-low interest rates he put in place may have staved off worse damage by priming investment in the private sector, they didn’t convince businesses to scale back to prerecession levels—unemployment remains high, and after a couple of years that started to bother some economists, like Paul Krugman, who point out that the Fed is mandated to balance unemployment as well as inflation. Last month, Bernanke caved, and to combat unemployment he’s turned to a promising idea developed here, by Chicago Fed president Charles Evans. The day Bernanke announced the aggressive bond-buying program tied to employment numbers that Evans had boosted for two years now, the stock market jumped like a frog for a fly, and I’m surprised more people in Chicago haven’t been gloating about it.