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Economists are looking beyond the usual data points like consumer spending, disposable income, and household wealth to measure economic progress. Social ties and perceived upward mobility matter just as much, according to Fed Chairman Ben Bernanke.
August 6
WASHINGTON — Despite the lagging economy, which has left many students graduating from college with fewer, if any, job prospects, there is cause for optimism in the medium term, Federal Reserve Board Chairman Ben Bernanke told teachers at a Town Hall meeting this week.
"Nobody can predict the future," Bernanke said. "But my best guess is that our kids will be better off than we are."
The Fed chief pointed to the nation's technological prowess and said it boasts some of the best universities in the world.
"Technology will continue and provide them opportunities," he said. "And the U.S. economy is well placed to take advantage of that. We have a very entrepreneurial culture."
If the country is able to develop "new technologies, new products, new markets," he said, it will give "opportunities for our children to have higher standards of living than we did."
Still, there are significant obstacles, he said, including a rapidly aging society. Many are retiring and receiving Social Security and Medicare payments that will only create future fiscal burden.
A broken educational system is "creating a lot of inequality, because you have some very good schools in the United States, and some that are very poor," Bernanke said. "And that creates a very different starting line of kids who are coming out of those different backgrounds."
Bernanke addressed the dismal job market for recent graduates, too, acknowledging the difficulty in breaking into the work force and gaining the necessary experience.
"There are lots of challenges. I don't want to deny that," he said. "But again, I think that over the medium term, maybe even the longer term, the intrinsic features of the U.S. economy, which have made it the richest economy in the world, together with the ongoing improvements in technology and the strengths we have in terms of our markets and our demography, all those things are going to be positive."
