The most important speech in America this week wasn't heard in Tampa; it was delivered in Jackson Hole, Wyoming.
The Federal Reserve chairman, Ben S. Bernanke, delivered on Friday a detailed and forceful argument for new steps to stimulate the economy, reinforcing earlier indications that the Fed is on the verge of action.
Mr. Bernanke said that the Fed's policies over the last several years have provided significant benefits, but that a clear need remained for the Fed to do more and that, in his judgment, the likely benefits of such actions outweighed the potential costs.
"It is important to achieve further progress, particularly in the labor market," Mr. Bernanke said in his prepared remarks. "Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability."
This wasn't an announcement, per se, but it renews speculation about likely action when the Federal Open Market Committee (FOMC) meets in two weeks.
As for the political circumstances, Bernanke, a Republican first appointed to the fed by George W. Bush, continued his long pattern of blaming Republican austerity measures, at least in part, for the weak recovery: "[F]iscal policy, at both the federal and state and local levels, has become an important headwind for the pace of economic growth."
In a not-so-subtle appeal, the Fed chairman added, "Monetary policy cannot achieve by itself what a broader and more balanced set of economic policies might achieve."
Or to translate this into English, "For the love of God, Congress, please do something to help the economy. Spending cuts are holding us back, so do the opposite."
The Republican convention just wrapped up, and we heard three straight days of various GOP voices blaming the fragile economic recovery on President Obama. For those who believe this nonsense, it's probably too late to persuade them otherwise, but Bernanke's speech reminds us that it's Republican austerity measures that are undermining economic growth and Republican lawmakers' refusal to consider public investments that have placed all of the pressure on a reluctant Fed.
We may soon see one of the more ironic political developments in recent memory -- voters may replace President Obama because of a struggling economy, rewarding the party responsible for the anemic growth, and punishing the party with the credible solution.