With many Americans critical over the Fed's aggressive monetary policy and a pending bill to audit the Federal Reserve, Bernanke has begun a public relations offensive to clear his name. James Picerno, author of The Capital Spectator, discusses why this is baffling behavior for a Fed chairman.
Your conventionally minded editor isn't used to seeing a Federal Reserve chairman take his monetary policy show on the road. Then again, we're from the old school, and we're not used to seeing pigs fly either. But we're obviously out of touch in the 21st century.
Ours is a world where formality gives way to "transparency," which comes in an ever-widening rainbow of colors. Fed chairman Ben Bernanke's "publicity tour" is certainly something new in the bag of central banking tricks. We thought that participating in so-called town hall forums and taking questions from the audience was an art reserved for politicians and talk-show hosts. We're wrong. It's also now just another tool in the otherwise dull business of managing money supply.
The old veneer of banking ceremony is fading, giving way to a penchant for empathy and personality tours. Imagine our surprise when we discovered that Mr. Bernanke was "disgusted" by some of the Fed's recent actions, as he explained to an inquiring member of the audience in yesterday's PBS television episode. Speaking of the various bailouts last fall, the Fed head confessed: “Nothing made me more angry than having to intervene, particularly in a few cases where companies took wild bets." Perhaps he might have simply said that the devil made him do it. Personally, we'd have like to see some tears to make the confession more convincing.
In any case, at least we know our Fed chairman is now sympathetic to the working man. Sure, the central bank has made some tough decisions, but it also has a heart. Expressing compassion of a sort for the little guy when setting interest rates and engaging in other activity looks to be the new new thing. Big, impersonal banking institutions are out; warm and fuzzy I-feel-your-pain monetary policy is in.
Is any of this surprising in the media-infested 21st century? Perhaps not. Indeed, Mr. Bernanke, whose term is up next year, is running for re-election to the Fed and of course he's intent on pulling every lever available on his behalf. Of course, before we can decide if his campaign is worthy of support we'll need to see his monetary policy platform. If it's superior to the plans of the rival candidates vying to run the Fed, well, perhaps Ben deserves another term.
To get the word out, Mr. Bernanke may want to consider running television ads in key districts. Sure, it'll be hard to capture viewers' attention by proclaiming to have a better monetary policy than the other guy. Television, it seems, just wasn't made for dispensing the finer points of quantitative easing and the value of watching M1 vs. M2. But, hey, that's a minor obstacle. Ben needs to speak to the man on the street, especially in those swing-voter districts that could tip the balance in what promises to be a tight race.
Actually, there's a bigger problem. Fed chairman aren't popularly elected, at least not yet. And last we checked, there are no obvious rival candidates openly campaigning for the Ben's position, at least not yet. Instead, the Fed chief is appointed by the President and confirmed by the Senate, or so we're told.
As a result, any resemblance between Mr. Bernanke's campaign for re-election—sorry, we meant reappointment—and a political campaign is merely coincidental.
This post has been republished from James Picerno's blog The Capital Spectator.
Photo from Wikipedia commons.