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Much of the news coverage has been on the president’s signature issue of healthcare and who or who has not signed up, missing was remarks by the Federal Reserve Chair on the American economy.

As the country was debating the merits of Obamacare, Federal Reserve Chair Janet Yellen, spoke at the National Interagency Community Reinvestment Conference, in Chicago on the Federal Reserve’s response to a stronger U.S. job market.

Yellen commented that the Federal Reserve was doing everything in its power to spur economic growth, and as she stated, “The Fed provides this help by influencing interest rates. Although we work through financial markets, our goal is to help Main Street, not Wall Street.”

The policy by the Federal Reserve has had the alternative affect by keeping interest rates at record low levels, which began under her predecessor, and continues to this day.

The Federal Reserve has for the past five years pumped well over $4 trillion dollars into its bond purchases which have made Wall Street recover from the financial meltdown, but Main Street has floundered during this recovery.

Much of the blame should be leveled at Washington and its response to the financial meltdown.  In response Washington passed Dodd–Frank Wall Street Reform and Consumer Protection Act an ill-conceived financial overhaul which is still being felt today.

Many of the key provisions have yet to be written, and its effect on small business growth has been profound.  Many small businesses rely on small regional banks for capital support and other financial needs, but they were hard hit by this new regulation.  With the major banks who created the crisis in the first place escaping or mitigating many of the provisions with their array of lobbyists and influence.

The average American is still facing the fallout from this devastating crisis in which both political parties contributed.

Yellen, commented that “there is still considerable slack in the labor market.” She continued, “For example, the seven million people who are working part time but would like a full-time job. This number is much larger than we would expect at 6.7 percent unemployment, based on past experience, and the existence of such a large pool of “partly unemployed” workers is a sign that labor conditions are worse than indicated by the unemployment rate.”

She continued to report the drop in unemployment has not raised wages for those that are employed as was the case in previous recoveries.

Yellen, further commented on what has been reported before regarding the labor participation rate. “When the recession began, 66 percent of the working-age population was part of the labor force. Participation dropped, as it normally does in a recession, but then kept dropping in the recovery. It now stands at 63 percent, the same level as in 1978, when a much smaller share of women were in the workforce. Lower participation could mean that the 6.7 percent unemployment rate is overstating the progress in the labor market.”

Many of the issues Yellen mentioned have already been addressed in previous writings but the continued polices by Washington have only added to the stagnation of the U.S. economy.

Washington continues to tinker at the margins of the economy and have never fundamentally addressed the concerns of most Americans.

Try being a small business owner without the array of lobbyists, lawyers, accountants, and influence which corporate America has at its disposal. 

Washington needs to understand small businesses account for the vast majority of jobs in America, but pay the disproportionate amount of pain from polices in acted by Washington.

It’s time Washington start paying attention to small businesses not corporate America.        

 

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