again assuming the fiscal authorities get it right. as jim has referenced, i may have called the bottom of the recession in the summer of 2009 well before most anybody else did, but i made the point in that dallas morning news interview that going forward, we were going to have a slow slog. 8 i have said many times since then that, in light of the fact that we were recovering from “ post - traumatic shock syndrome ” stemming from the panic of 2008 and 2009, economic recovery would proceed hesitantly, taking two steps forward and one step back until it finds its new legs. we took a step backward in the first half ; i expect we will proceed forward, however haltingly, in the second half and into 2012. eminent economists : their life philosophies, ed. michael szenberg, cambridge, england : cambridge university press, 1992. “ consumer and business spending to spur expanding u. s. economy, ” by phil izzo and justin lahart, wall street journal, feb. 14, 2011. “ recession over, dallas fed chief says, but jobs lag, ” by brendan case, dallas morning news, aug. 26, 2009. bis central bankers ’ speeches the point is that i do not think we need be stuck in the low gear of the first half. some of the temporary influences that i believe retarded growth in the first half – high gasoline and unprocessed - food prices, the supply disruptions in japan, etc. – are passing through the system and are either being reversed or digested. to be sure, some businesses are being hit with higher input costs from imported goods and other nonlabor cost increases. having become as lean as possible and having learned to preserve their margins by years of tight cost management and by maximizing productivity, they don ’ t have much fat to absorb the cost of input increases. if input price increases continue or spread, these businesses will naturally attempt to pass them on to consumers, who are wary of anything else that will compress their living standards. i see a bit of a tug - of - war developing here. the issue will be whether businesses can exercise pricing power in the face of fallow consumer demand. as an inflation “ hawk ” – i prefer to think of myself and my 16 colleagues, hawks and doves alike, as wise owls – i am watching this very carefully. if i see inflation continuing to rise and, most importantly, inflationary expectations beginning to spread, i

people employed as we did before the recession began. our banks are in better shape than those in the rest of the country ; we are benefiting from the blessings of nature, with copious amounts of oil and gas and abundant agricultural production ; our fellow citizens have seen to it that our legislature continues to hew to a tax, regulatory and legal environment that attracts job - creating investment and encourages business formation and growth. and yet, even in this blessed state, there are too many unemployed and underemployed, just as there are in the rest of america. we can do better. america must do better. the question is : how? to create employment, we must have economic growth. the simplest of econometric equations posits that the key components of economic growth are domestic consumption, plus foreign demand for u. s. - produced exports, plus investment by businesses, plus spending by government. i think it is pretty clear to everyone who lives on the planet that in order to grow our economy and put our people back to work, we must rely on our ability to curry to domestic and foreign the great recession ’ s end date was established by the national bureau of economic research, which officially declares the beginning and end of recessions. bis central bankers ’ speeches consumption and invest here at home to produce the goods and services to sell in the marketplace. you ’ d have to be from mars to believe that the federal and state governments will be the source of much direct spending stimulus to the economy. presently, all eyes are focused on the budget negotiations in washington as the debt - ceiling clock ticks on. aesop ’ s classic fable comes to mind. rather than work like ants to build and store for difficult times, our fiscal authorities – congress after congress, under republican and democrat leadership alike, and with presidents of both parties occupying the white house – have been proverbial grasshoppers. except for a few interludes, they have partied along for decades using the people ’ s money as though life were an endless summer, storing nothing to draw upon for the blustery fall and the bleak winter that inevitably follow. now a fiscal reckoning is upon us. the gig is up. congress can no longer carry on as before, oblivious to the deleterious effect of spending our, and the successor generations ’, money with unfunded abandon. tongue firmly in cheek, carol reed might have reminded us that there are alternative versions of this fable. in 1924,