that might contradict, or place in jeopardy, the long - term duty and credibility of the central bank. i am wary of adopting any policy that might have the unintended consequence of becoming a veterinary fix rather than a more salutary repairing of the ability to propagate jobs. it is no secret that i thought the second round of quantitative easing ( qe2 ) ran that risk. i could not support it when it was proposed because i saw no analytically sound justification that its purported benefits would outweigh its likely costs. similarly, at our last meeting, i felt that the benefit of stating that the fomc anticipates economic conditions were likely to warrant holding the base rate at “ exceptionally low levels … at least through mid - 2013 ” was outweighed by the risk that such an action would be viewed as a commitment. the majority of the fomc felt that anchoring the fed funds rate where it is for two years would assure markets and incent business activity. i felt doing so would, instead, give job - creating companies, particularly small - and medium - sized businesses, an incentive to further delay “ the sluggish recovery from the great recession : why there is no ‘ v ’ rebound this time, ” by mark wynne, federal reserve bank of dallas economic letter, vol. 6, no. 9, 2011. bis central bankers ’ speeches borrowing for expansion, given that they feel stymied both by anemic demand and discomfort with how they are taxed and regulated. it seemed to me that signaling that money would likely remain cheap for two years or more would hardly induce those with access to credit to borrow to expand and add to payrolls now. this discomfort was compounded for me by the confusion and disorienting uncertainty arising from the debacle of the debt ceiling negotiations that took place shortly before the fomc meeting – an uncertainty that has yet to be resolved. moreover, it struck me that such a stance risked creating a perception that the fomc might be a little bit trigger - happy in reacting to short - term developments in the securities markets ; that we were collectively signaling there was a readily available “ bernanke put. ” the press and the street are currently brimming over with assumptions about new fixes. market operators are, to varying degrees, pricing in probabilities of one or more of the following : further expansion of our balance sheet ; an “ operation twist,

the current recovery corresponds almost exactly to the long - run ( 40 - year ) historical gap between our growth rate and the nation ’ s. the shortfall in jobs at the national level is but one indicator of the pervasive anguish of american households since the panic of 2008. another sign of that anguish is that average real per capita net worth in the united states has not regained the losses incurred in the latter part of the last decade. at the end of the first quarter of 2011, average per capita net worth was nearly 14 percent below the peak seen four years earlier. real income has not fared as badly, but per capita salary income is, nevertheless, almost 2 percent below its peak in the first quarter of 2008. a likely widening of income dispersion over the period, however, suggests that median income has probably fared worse. we will get a better read on this when the federal reserve board completes it triennial survey of consumer finances early next year. i do not expect that survey to paint a pretty picture. i am most aware, as are many of you, that if history is any guide, getting back to where we were will be no small task. the 2008 – 09 recession was precipitated by a banking crisis. a number of you, including ken rogoff, have shown that downturns associated with banking crises tend to be the most severe, and that clawing back lost employment and output in the aftermath of a financial crisis is most vexing. my colleague mark wynne, who directs our globalization and monetary policy institute, has written an excellent brief on this for our economic letter publication, which should be posted on our website today. bis central bankers ’ speeches this chart of output relative to precrisis trend summarizes mark ’ s conclusion : since the onset of the financial crisis in 2008, “ performance of real gdp in the u. s. is almost exactly in line with what we might have expected based on the average experience of other countries that have gone through banking crises. ” 1 this chart is most definitely not a pretty sight. small wonder that american consumers – and the businesses that hire and serve them – remain in a defensive crouch. the question is : how do we change the picture? how do we get the pistons of job creation, income growth and wealth restoration pumping again? this is the gist of the discussion at the fomc table. the press and others delineate the viewpoints around the table on