Sunday, August 30, 2009
This mostly glowing commentary in the current issue of The Economist about the recent success of one of their own - the renomination of Federal Reserve Chairman Ben Bernanke last week - contains the following news about the central bank's slide in opinion polls.
Professional economists have applauded Mr Bernanke’s actions, but the public has not. The Fed’s approval rating stands at just 30%, lower than any other federal agency and down from 53% in 2003, according to Gallup. Partly this is because the economy has faced a devastating recession that the Fed was meant to prevent. But it also reflects discomfort with the Fed’s meddling in private markets.Those confirmation hearings may prove to be quite exciting after all, particularly after the recent court decision to allow Bloomberg's Freedom of Information Act request to move forward and the expected passage of the Audit the Fed bill in the House of Representatives.
Central bankers expect to be unpopular, but the Fed is uniquely vulnerable now. A bill in Congress would subject its most sensitive decisions to legislators’ scrutiny, while the administration has proposed expanding its regulatory oversight to contain future crises. This has thrust Mr Bernanke into the political arena: he appears to be at odds with Tim Geithner, the treasury secretary and a former colleague at the Fed, over his proposal to strip the central bank of its consumer-protection duties. Just one senator voted against his confirmation in 2006; between 10 and 25 from both parties may this time, though that will not deny him confirmation.
This week's cartoon: