In a development that might seem mundane, but would have been unimaginable not all that long ago, the Federal Reserve talked about the chairman hosting press conferences.
The once secretive central bank has come to this, the possibility that Chairman Ben Bernanke would expose himself to the hurly burly of questions from members of the media. It was in the working life of this columnist that even changes in Federal Reserve monetary policy weren’t publicly announced. They were divined from market activity.
If Bernanke press conferences became a reality, some questions would be pointed. Some would be uninformed. The answers likely would stay obscure to most citizens.
Still, it’s a great idea.
There’s no guarantee the Fed will get there. In meeting minutes released Tuesday, the topic of press briefings was referenced. The subject was addressed in a video conference of Fed policy makers on Oct. 15.
All the minutes say is this: “Participants discussed whether it might be useful for the Chairman to hold occasional presss briefings to provide more detailed information to the public regarding the Committee’s assessment of the outlook and its policy decisionmaking than is included in (the) Committee’s short post-meeting statements.”
The Committeee is the rate-setting Federal Open Market Committee.
This special Oct. 15 video conference was described in a phrase that would make any corporate bureaucrat proud. There was no chance for that meeting to fail to accomplish. Communications issues and the pros and cons of setting a target for a term interest rate were discussed. The quote is this: “The agenda did not contemplate any policy decisions and none were taken.”
Back to the press conference idea. They should be more frequent than simply occasional, the theoretical time frame mentioned in the minutes. The Fed is a mystery to most people. Some think such economic power in the hands of independent and unelected officials is out of step with democratic institutions. Bernanke press conferences would help demystify the Fed and make it more democratic.
Like it or not, The Fed and its policies already are fodder in the political arena. The latest bond-buying plan to stimulate the economy earned the ire of a number of Republican lawmakers. In the run-up to new financial services regulation, a Democrat-controlled Congress mulled clipping the Fed’s regulatory wings and threatened its monetary policy independence. Nothing ultimaately happened there (the Fed got increased regulatory powers).
But clearly, there have been politics surrounding the Fed on both sides of the aisle.
Press conferences could help by increasing the Fed’s standing with the public, or some interested portion of it. If you wind up in Rome, do as the Romans do. Find a lectern and state your case. Take on the questions and defend your positions. Get your sound bites distributed far and wide.
Bernanke and his like-minded colleagues have mounted a decent defense of the $600 billion Treasury securities buying plan through public appearances and in speech texts. Adding press conferences makes sense as a next step.
