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,

guidance in a sentence, ” by chris giles, financial times, money supply ( blog ), oct. 2, 2013. giles announced the “ forward guidance in a sentence … winner ” on twitter later that same day. bis central bankers ’ speeches so that ’ s where we are : “ we ’ ll see. ” or as deng xiaoping would have phrased it : “ we will cross the river by feeling the stones ” ( [UNK] 石 [UNK] [UNK] 河 ). we will feel the stones of the economy with the bottoms of our feet as central bankers and proceed accordingly. draghi ’ s old man at a recent meeting i attended in frankfurt, mario draghi of the european central bank told of a man who needed a heart transplant. the doctor leveled with him that he had several choices, including the heart of a 75 - year - old central banker. “ i ’ ll take that one, ” the man answered immediately. “ why? ” the doctor asked. “ well, ” said the man, “ because it ’ s never been used. ” as was made clear in chair yellen ’ s speech in chicago earlier this week, central bankers have hearts, and the fed is working to harness monetary policy to relieve the plight of the cyclically unemployed. but we also need to be vigilant in making clear that we are obligated to maintain price stability and that allowing inflation to take grip is a cardinal sin for a central bank, for it is the cruelest of afflictions for all of society. joachim fels of morgan stanley noted that draghi ’ s little joke serves as a reminder not that my colleagues and i at the federal reserve belong to a heartless tribe but that “ central banking is about making rational, cool - headed and unemotional decisions often under difficult circumstances ” 7. we must conduct monetary policy in a cool - headed and unemotional manner in order to achieve both of the mandates congress has given us – preserving price stability and achieving full employment – while avoiding financial market turbulence. this is the very best we can offer you, whether you are from ancient ithaca or delphi or modern hong kong. those who think we can be more specific in stating our intentions and broadcasting our every next move with complete certainty are, in my opinion, clinging to the myth that economics is a hard science and monetary policy a precise scientific procedure rather than the applied best judgment of cool - headed, unemotional decision - makers. we will cross the river that separates