Bernanke predicts the economy will recover in 2010 if

Here is what Bernanke said via Reuters:

Bernanke, in a rare interview with CBS program "60 minutes," largely upheld the Fed's view that there was a reasonable prospect the recession that took hold in December 2007 would end this year and that 2010 would be a year of recovery.

"We'll see the recession coming to an end probably this year," Bernanke said. "We'll see recovery beginning next year."

Given that we've finall seen the DOW actually go up this last week, and given the surprising good news that:

Battered U.S. banks showed signs of life last week, with Citigroup, Bank of America and JPMorgan Chase saying they have returned to black early this year and assuring they should ride out the recession without more taxpayer help.

"It seems as if overall worry about the U.S. financial sector is fading," said Noritsugu Hirakawa, a strategist at Okasan Securities in Japan (Reuters)

We might well be inclined to share Bernanke's optimistic appraisal of the situation.

But not so fast. Bernanke stressed that the recovery is only possible if the political will is present. So is it?

In one sense the answer is yes: Obama has issued plans to stop foreclosures and lower mortgage payments. And of course the stimulus was passed.

But there are problems. Some economists think the stimulus is too small. Worse, many economists - including Noble prize winner Paul Krugman - think Geitner's approach to our failing banks is a disaster. This last is particularly discouraging as (via Reuters again) Bernanke's stressed that:

"The biggest risk is that, you know, we don't have the political will," he said. "We don't have the commitment to solve this problem, and that we let it just continue."

"In which case ... we can't count on recovery."

When you add to this the fact that AIG used its bailout money to give bonus to fat cat CEOs, the initial optimism of Bernanke's comments fades away pretty fast