Four to Five Years Before Return to 'Normal' Jobless Rate
On the one hand, Bernanke said, "At the rate we're going, it could be four, five years before we are back to a more normal unemployment rate."
During the downturn, 8.5 million jobs had been lost and only about 1 million had returned. Bernanke was especially concerned about those unemployed for six months or more. Their skills -- and their attitude -- begin to erode.
On the other hand, Bernanke didn't anticipate a double dip recession. Already key sectors such as housing were down so far that they can't go down much further. And, long term, he said he had "lots of confidence" in the American economy.
The reasons for Bernanke's optimism include America's great university system, which generates technological innovation. Bernanke also cited the correlation between education and employment. The unemployment rate of college graduates, he pointed out, is five percent. For those who didn't graduate from college, joblessness is double that.
A second reason for trust in the American way of business is its entrepreneurial spirit. Incidentally, following Bernanke on '60 Minutes' was Facebook founder Mark Zuckerberg who is increasingly considered the entrepreneur of the digital age, even more than those who founded other high-tech brands like Google and Apple.
A third reason is that the Federal Reserve recently "invested" about $600 billion to buy back U.S. Treasuries. That will hold down interest rates, freeing up the market to buy big-ticket items like cars and houses. Bernanke stressed that the funding to do this came from reserves, not the U.S. taxpayer, and has zero effect on the budget deficit.
Bernanke's "big idea" to put the economy back into a high growth mode? Clean up the tax code.