Stopping at Burger King on the way to Jackson Hole

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Stopping at Burger King on the way to Jackson Hole
By: Todd M. Schoenberger, @TMSchoenberger

Next year, I’m taking a road trip. Yeah, grabbing my favorite economists, and loading the Winnebago with cases of Zima, boxes of Omaha Steaks and Jenga. Time to party like a rock star in the one area of the country that is more popular today than Disney World:

Jackson Hole, Wyoming!

This is the location of choice for those crazy party people known as the Federal Reserve. They’ve been holding their annual symposium at this location, which bumps up with the Idaho border, since 1978. According to the Jackson Hole Chamber of Commerce, it’s the best place for hunting, rafting, horseback riding and more! Can’t wait to see the pics of Bernanke, Yellen and Raskin navigating through the whitewater rapids. I’ll bring the popcorn.

Believe it or not, though, it’s also a place where business gets done; at least this week. The idea is to get everyone together in a casual environment and have open discussion about important topics: interest rates, inflation, job growth and if it’s a good idea for the Nationals to sit Strasburg. That last one may get testy and turn into a Geraldo moment of throwing chairs. Stay tuned…

But the best part of this end-of-summer event is the speech given by the Chairman of the Federal Reserve. Ben Bernanke is expected to address the central bankers, policy experts, academics, media, and everyone with an interest in finance at 10:00am, EST, today. And the question everyone wants to ask: When will the Fed provide another steroid shot to the United States economy?

The reason why Jackson Hole has turned into a brouhaha is because of comments the Fed Chairman has given at prior symposiums. For example, in 2010, Bernanke said a second round of stimulus—QE2—was “likely”, and the Fed did not disappoint when it began another round of bond buying in November of that year. So, what’s Ben going to say today?

Well, in his typically teasing fashion, he wrote a note to Representative Darrell Issa with this exact quote: “There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery.” He also noted that Issa is to bring rolls and a bag of ice to the Chairman’s annual Labor Day cookout.

Seriously, though, the Chairman is set up to fail today. Unless he specifically announces a massive shock-and-awe program of further accommodation, everyone will be disappointed. We can call this the Bernanke bubble, and those hoping for more juice have been blowing it up thinking he will deliver something we don’t need now.

The original intent of an additional QE program was to keep the economy away from a double-dip recession; now, it seems, everyone wants to “spark” the economy.

Well, this isn’t Burger King, and the addicts out there can’t have it their way. If the economy is able to rally in an organic way, there is no need to expand the balance sheet. And, if anything, the recent data supports the notion of buying time. Bernanke is no fool and will use this time as leverage to support delaying further destruction of the Fed’s reputation.

I, for one, am hoping to see a slideshow of those rafting trips than a formal, unappealing, plan for further policy action. It’s time for the Fed to quit playing nurse and stop offering hollow hopes for additional accommodation.