Just yesterday, Federal Reserve Chairman Ben Bernanke told the Joint Economic Committee of Congress that he believes it's possible that the economy is in recession and that he expects further rises in employment.

The cause is an unsustainable dependency on credit over earnings to get the public to pay for goods produced in other countries by companies that underpay American workers while overpaying CEOs and are given sickening tax breaks by our government. Why should big oil get billions in tax breaks while reporting record earnings?

These inequalities result in consumers being pounded by media to buy products they don't need and to buy them with credit. When things get too expensive, consumers pull back, and the companies respond by laying people off.

In short -- the people have a recession while Wall Street fat cats continue to profit.

He defended bailing out Bear Stearns to prevent the investment bank from declaring Chapter 11, and the Fed opened short-term interest rates to other investment banks to help keep them afloat. Rates have gone as low as they can go without pouring gasoline on inflation and lighting a match.

But when it comes to homeowners, he told the committee that helping them is Congress' job, not the Fed's.

While he has a point about that, it wasn't within the Fed's purview to help out investment banks either, so if he can stretch the Fed's charter there, why not for homeowners?

Credit is as much a problem for consumers as Wall Street. We've created an addiction where 40 percent of us spend more than we earn. We've had a negative savings rate for three years in a row. And with a government that racks up $59 trillion in debt, or $516,000 per U.S. household, we don't have much of an example to follow. We simply can't afford to buy everything that comes on the market. So a couple of million of us are defaulting on our homes and on our credit cards. We're backing off on buying cars and other big ticket items. Jobs are being lost, and still the CEOs go on collecting huge salaries.

Maybe what the Fed can do is sweeten short-term rates with a catch. Better rates for those banks willing to work with consumers to lower their default rates on mortgages and credit cards. Better rates for those banks that lower borrowing rates to consumers on credit cards. Better rates for those banks that keep lending to consumers.

Bernanke's wrong. There is something the Fed can do.

Published: April 3, 2008

Use of this article without permission is a violation of federal copyright laws.

Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.