admission: “We don’t have a precise read on why this slower pace of growth is persisting.”
Bernanke was announcing the end of the Fed's attempt at indirect monetary stimulus, "quantitative easing 2", despite the continuing accumulation of evidence that the expected take-off of the "recovery" is not going to materialize. Jobs and home sales are both heading in the wrong direction. Manufacturing is slowing around the world. The EU did manage to avoid a disaster it nearly brought on itself, by forcing Greece to accept measures that will continue to destroy its economy, but for that very reason the disaster has only been delayed.
Everyone keeps telling themselves that growth will begin in earnest once the "temporary" dislocations - high oil prices, fallout from the Japan earthquake, bad weather - clear up. What they don't mention is that a variety of even more terrifying shocks threaten to make these look like a spring rain: Greek default (or that of Spain, or Ireland, or Portugal), perhaps bringing down the eurozone; an American failure to extend the debt limit, setting off global finanical panic; collapse of the Chinese real estate bubble, which thru its long supply-train connections to the commodity producers of the world, could pull the entire global economy into the abyss.
Bernanke voices the confusion of the entire economic establishment: why aren't things getting better? Undoubtedly Obama and his economic team have been asking themselves the same question for some time now. After all, political cowardice can only go so far in explaining the utter failure of the administration to formulate a response to the crisis. The neoliberal mainstream has now exhausted its conceptual resources and is effectively paralyzed by indecision, leaving it vulnerable to the predations of the rightwing austerity advocates.
This bewilderment is worth exploring further. The explanation I have laid out for the continuing crisis is not particularly complicated, yet it remains unvoiced in the mainstream media, apparently outside the realm of conceptual possibility for neoliberals. The problem is that they understand market forces not as a particular kind of social relation that emerged historically to overcome the breakdown of an earlier configuration of social relations, but as a transhistorical manifestation of human nature. It is this almost metaphysical belief that grounds the universalizing impulses of the IMF, World Bank, and WTO - not the business interests of global financial players and multinational firms featured in so many left critiques. When neoliberalism was healthy, the desire to universalize its forms allowed it to continue expanding. In its crisis, the same policies now intensify its dysfunctions.
To understand this would require an appreciation of the historical constitution of human subjectivities and social structures. For the Tea Party enthusiast there is no society. But the policymaking neoliberal is different; he can produce a pale semblance of the idea of society in his mathematical models of aggregated individual choices. This approach cannot, of course, grasp the far more complex process by which society is constituted and reshaped, an approach that, unlike neoliberal models, can provide an account of how individual choices are produced. But the policymaking neoliberal's fundamental failure is elsewhere: he cannot see history.