NEW YORK (CBS) -- STEERING A FRAGILE AND PUZZLING ECONOMY
At a meeting of its Open Market Committee yesterday, the Fed decided to keep its key interest rate at current record lows for an "extended period."
This, despite the fact that economic activity is continuing to struggle to its feet, the housing market is showing signs of life, and the government has been pouring dollars by the trillions into the money supply.
The Fed is saying that raising interest rates anytime soon would be like stepping on the brake with one foot, while pushing hard on the accelerator with the other. Tricky business, economists say.
"It’s extremely tricky," said Julia Coronado, an economist with BNP Paribas.
"I mean, we haven't been here before - both in terms of the financial crisis, in terms of the policies they're engaged in."
Everything the Fed does has consequences - and they know it, said CBS News Business Reporter Alexis Christoforous: "I think the Fed was very careful not to be too enthusiastic about the future of the economy. And the Fed is concerned that any hint of a rate hike would prompt investors to sell Treasury bonds. That could send rates on consumer and businesses' loans higher, and that would endanger our recovery."
Aren't they worried about inflation?
"There's so much slack in the economy that there really is no particular danger from inflation becoming a problem right now," said Prof. Peter Sperling, an economist at Touro College.
"What you want is to make it easier for consumers to spend on new homes, new cars, new refrigerators, stoves, appliances, and so on."
And, for employers to start hiring again.
Tom DiBenedetto had eleven employees in his building contractor business in Nyack, New York. Now, he's down to two - and would love to start hiring again.
"But I don't wanna commit to hiring somebody and hire them --- and then all of a sudden, a couple of months down the line, not have work for them," DiBenedetto said.
The economy is a puzzle, said CBS News Business Correspondent Anthony Mason: "Fed Chairman Ben Bernanke's facing some critical decisions in the coming months, as he tries to solve this Rubik's Cube of an economy."
DECISIONS NOW AND YET TO COME FOR AFGHANISTAN
Decisionmaking about a place like Afghanistan is difficult, because the enemy keeps forcing your hand.
The UN has now decided - after last week's deadly Taliban attacks on UN forces there - to relocate more than half its international staff.
"We are not talking about pulling out, and we are not talking about evacuation," said Kai Eide, UN Special Envoy in Afghanistan.
"We're simply doing what we have to do."
"We remain absolutely committed to this country," said UN spokesman Adrian Edwards.
"Don't forget, the United Nations is no fly-by-night organization here. We've been here for more than half a century, through some of the most difficult times."
Relocating so many UN staffers won't be easy, he said: "We don't have a choice here - we have to make sure our staff are safe."
And it's only temporary, they hope.
"The hope is that it will only be for a short period of time," Edwards said.
Meanwhile, President Obama is still trying to reach a decision about U.S. troop strength and other important policy matters in Afghanistan.
The Chairman of the Pentagon's Joint Chiefs of Staff - Admiral Mike Mullen - told the National Press Club in Washington yesterday that fighting the insurgency in Afghanistan gets tougher - and the decisions that President Obama has to make keep getting tougher, too.
"There's been a lot of discussions, a lot of questions and clarifications on exactly what the specifics are - and quite frankly, I applaud that," said Adm. Mike Mullen, Chairman of the Joint Chiefs of Staff.
So far, said Pentagon spokesman Geoff Morrell, the lengthy decision process has not affected military operations on the ground.
"Everything that is needed for this calendar year has been dealt with, and has not been adversely impacted in any way by the discussions that are taking place at the White House," Morrell said.
He said Secretary Gates and everybody at the Pentagon is simply trying to help the President to decide.
"The Secretary believes the process continues to be a useful one," Morrell said.
"And he is working, as our other people are in this building, to try to help the President arrive at a decision on this matter."
CURBING ACCIDENTAL DRUG OVERDOSES
In an ideal world, all an agency like the FDA would have to do is just put information on the medicine bottle and that would be enough. But in the real world - in the bathrooms and hospitals, doctor's offices, and homes - people make mistakes.
"It isn't just overdoses - it's all kinds of mistakes in prescribing, in using drugs, or even inadvertently exposing children to medicines that they then might take and be injured or have to go to the hospital," said Dr. Janet Woodcock, director of the Center for Drug Evaluation and Research at the FDA.
"So, there're a wide range of incidences where medications cause harm, if they aren't used safely."
The FDA now realizes that in the real world people aren't perfect, said Dr. Woodcock.
"We're going beyond our traditional regulatory role in saying we aren't just changing a label or putting warnings on," she said.
"We're going to take charge of making sure that the outcome is successful, that people aren't overdosed by drugs, that we're going to work with the outside world - the private sector and so forth - to make sure that we have the right outcome, that we reduce this kind of harm."
The FDA isn't in the hospitals, but they know what goes on there.
"Each year, we know that there are 400,000 patients in hospitals that have a preventable reaction to a drug," Dr. Woodcock said.
The FDA would be shocked to see how prescription bottles are left out on the bathroom sink, where anybody can pick up the wrong bottle - including the kids. Right now, the FDA has the information, said Dr. Woodcock.
"But if that information is not at the point of prescribing or the point of use by patient or consumer, it's not doing any good," she said.
"And that's where a lot of this preventable harm happens, because people aren't assimilating that information."
Where are we headed with this? Watch out, everybody: Here comes the FDA...
GAP IN SUPPLY VS. DEMAND FOR FLU VACCINES
The three strains of regular seasonal flu should not be taken lightly - they kill 36,000 people a year in the United States. It's still a little early for that sort of flu - there've been virtually no cases of it so far - but it is coming. The H1N1 swine flu is a different story, though.
Already, said Dr. Thomas Frieden, director of the CDC, "We have had well over 20,000 hospitalizations and more than a thousand deaths - including 114, at least, among children."
And at this point, there are shortages of both the regular and the H1N1 vaccine. The regular seasonal vaccine and H1N1 swine flu are linked, said Dr. Anthony Fauci of the National Institute for Allergy and Infectious Diseases - because, for one thing, "The same companies that were making the seasonal flu (vaccine) are the ones that are making the H1N1 influenza (vaccine)."
There's an unfortunate gap between demand for both kinds of flu shots. It will be closed - although in the case of swine flu, it will be too late for some people, said Dr. Fauci.
"It will not be too late for a large number of people," he said.
"But unfortunately, there are some - as we see every day, as we see people get infected - that if they had had the vaccine, that might've been prevented."
It's very frustrating, of course, he said. "We already have on hand about 30 million doses - we obviously had hoped to have much more. So, the gap between supply and demand is a large gap that is gradually starting to close."
The projections were that we would have enough - and the CDC simply passed those projections along, said Dr. Frieden: "With 20-20 hindsight, it's clear that we should have been more skeptical about the projections that were being made.
"And we anticipated that having five different manufacturers would provide more insurance that it has."
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