Yesterday, during his press conference to explain why he decided not to Taper the rate of Quantitative Easing (money-printing), Ben Bernanke mentioned that he was distressed by the fall in the U.S. Labor Force Participation rate.

It is a little late in the game for him to be noticing that. The U.S. Labor Force Participation Rate has been declining for years.

In fact, it has declined at a faster rate during the era of Quantitative Easing! QE appears to contribute to this problem

How might that be the case? It might be that QE degrades the labor market by encouraging companies to focus more on financing and investing activities (taking advantage of low interest rates) instead of operational activities which tend to require labor.

The Fed seems to be in a pickle with this one.

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