Bernanke becomes a TV star
Ben Bernanke sat down for an interview in Kansas this weekend, which is odd in and of itself. To make matters even stranger, he took questions from an audience that included the locals.
The "chat" with Mr. Bernanke will air on a number of PBS stations this week. According to the PBS web site: "Federal Reserve Chairman Ben Bernanke reflected on his desire not to be the Fed chief who 'presided over the second Great Depression.'"It is probably the first time that Bernanke has mentioned this concern. In his most important analysis of the crisis given during the interview, he explains how he felt that if large American banking institutions had failed, the entire financial system would have collapsed.
Bernanke is viewed as something of a hero now. He is likely to be reappointed Fed chair in large part because of his actions late last year when the credit markets were falling apart. But it takes away some of the dignity of the Federal Reserve to have its chairman appear in a town hall meeting like a local Congressman seeking reelection. Bernanke hardly needs to defend or explain his decisions to the public at large. He is not elected by the public and explaining Fed policy to people who may not be sophisticated in financial matters probably does more to confuse than to educate.
Congress has been concerned about expanding the Fed's role to make it a "super regulator" of the U.S. financial system. Many legislators believe that the Fed should not be involved in the day-to-day workings of the credit system. The Fed has a status that transcends functions of government regulatory agencies like the FDIC.
Making TV appearances is not likely to give Congress much comfort about the Fed maintaining its Mount Olympus-like status.
Douglas A. McIntyre is an editor at 24/7 Wall St.