Considering that the weather forecast is for thunderstorms today and tomorrow in Jackson Hole, Wyoming and, aside from when it comes to operating a printing press, economists are not known as risk takers, the attendees of this year’s Federal Reserve confab may be inclined to avoid braving the elements, a decision that could result in more work than play.

It’s not clear whether that would be a particularly good thing or not as some (such as host Thomas Hoenig of the Kansas City Fed) now feel that the Fed might be doing more harm than good for the U.S. economy. The latest developments on the central bank’s group therapy session about  150 miles south of here are provided by the Wall Street Journal.

Economists still put low odds on the economy falling back into recession, but they acknowledge that the likelihood has been rising. Double-dip recessions are rare in history, sometimes the result of policy mistakes—such as pulling back stimulus too quickly or aggressively, as happened in the U.S. in the 1930s and in Japan in the 1980s. The most recent case of an economic relapse in the U.S. was the 1981-82 recession, which followed the 1980 downturn.
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Mr. Bernanke’s speech signaled that the Fed’s position has shifted notably in the past few months. Early this year, officials spent much of their time planning an exit from easy money crisis policies, and unwound several of their emergency lending programs. Now, if the Fed takes any action, an easing of policy looks more likely than any tightening.

Fed officials disagree on whether more action is needed and whether the steps the Fed chairman outlined would be effective. The consensus-driven Fed chief is weighing the arguments among the dozen regional Fed bank chiefs and the four other Fed board members who have a say in Fed policy as he assesses whether to do more.

“None of the (Fed’s options) would move the needle significantly on either the economy or the risk of deflation,” Harvard professor Martin Feldstein said after the Fed chairman’s speech. Interest rates are already very low, he noted, but that has not generated much consumer or investment demand. “He’s in a bad spot.”

Yes, a bad spot it is… Sometimes you have to wonder where we’d be now if the government and its central bank had done nothing back in 2007 when the housing bubble first began to pop. Asking that question in a few more years will likely provide a clearer answer.