Strange days, indeed, when you see the chairman of the Federal Reserve acting like hes running for office. Fed chairmen are supposed to remain iconic and above the fray, but you wouldnt know that reading the reports on Ben Bernankes Kansas City sitdown on Sunday with Jim Lehrer, where it sounds like Bernanke has gone all man-of-the-people.
Not that theres anything wrong with going man-of-the-people, but its a tough shtick when youre battling the perception that youre defending fat-cat bailouts in the face of dire working-class reality. Everybody knows the unemployment rate is headed for double digits, most of us would agree that we have a broken health-insurance system and working people in America, as a rule, are simply worse off than they were one, three, five years ago. Institutional investors may not be as viscerally damaged by recent economic turmoil, but neither are they pleased with it.
Heres a beautiful, one-sentence paragraph from Sunday nights WSJ.com article on the Bernanke-Lehrer tete-a-tete: Mr. Bernanke repeatedly used the frustrations voiced by people in the room to show his limited options during the crisis and reiterate the need for a regulatory overhaul.
Frustrations voiced by people in the room no kidding, I cant wait to watch. The interview will be broadcast this week, according to PBS (check your local listings, I guess; thanks a lot for the heads up, there, PBS).
What many Bernanke watchers may find irksome is what comes off as a kind of two-face quality to his recent public appearaces, if they are taken collectively. In Kansas City, he was pleading and explanatory. On Friday in Washington, he told members of Congress to butt out and mind their own business. Were talking here specifically about his opposition to a bill that would let the Government Accountability Office conduct routine audits of Fed banking policy.
Heres what he said: We are more than happy to work with the GAO and open to giving them broad authority to look at various aspects of our operations, including our responses to the financial crisis, but we are worried that an audit of monetary policy would result in a reduction of the independence of the Fed.
Fact is, the Fed is already audited in myriad ways, the minutes of its meetings are made public and theres not that much it does that goes unreported. So whats the big deal? Maybe its the source of the latest proposal that bothers Bernanke it comes via Republican Ron Paul, the Texas congressman who is (lets choose reasonable words here) uh, eccentric and something shy of mainstream. Paul has a small but devout antigovernment following. His audit-the-Fed bill has a bigger following: Already more than half of the House of Representative have signed on.
Bernanke mightve done well to shrug and let it go. It wouldve been more befitting of this man-of-the-people thing.