Candidate Bernanke hits the campaign trail

July 27, 2009

JamesPethokoukiscrop.jpgIf Ben Bernanke were running TV ads, taking polls and holding town hall-style meetings, it wouldn’t be any clearer that he’s conducting an explicit reelection campaign for another four-year term as Federal Reserve chairman come next January. Oh, wait a second, he just did hold an unprecedented town hall meeting. And it was one worthy of a presidential candidate charming primary voters in Iowa.

At the Kansas City Fed last night, Bernanke answered a couple dozen questions from 190 area residents for a three-part public television broadcast. Like a veteran politico, he tossed out the occasional platitude (“The best way to have a strong dollar is to have a strong economy”), railed against Washington (“I don’t think the American people want Congress running monetary policy”), gave a riveting and heroic personal narrative (“I was not going to be the Federal Reserve Chairman who presided over the second Great Depression”), and got downright folksy when talking about too-big-too-fail (“When the elephant falls down, all the grass gets crushed as well”).

Message to America: Ben Bernanke, a pharmacist’s son from Dillon, South Carolina, feels your pain. Now it’s not as if previous Fed chairmen haven’t campaigned for another four-year hitch. But the usual modus operandi is to curry favor with the Electorate of One — the president — who will be doing the renominating. And the precise mechanism has been a growth-friendly monetary policy.

Of course, the Fed has already been, to use Bernanke’s town hall phrase, “putting the pedal to the metal” to bolster the fragile economy and financial system. And that’s sure been to Wall Street’s liking. A Reuters poll last month found that economists rated Bernanke at eight out of 10 for his handling of the financial crisis.

But Bernanke’s smart to try and also get Main Street on his side. Obama, for instance, might prefer a more dovish Fed chair, such as San Francisco Fed President Janet Yellen, who’ll worry more about unemployment than inflation as the 2010 and 2012 elections near. Bernanke’s pushback against Obama’s proposals for a consumer financial protection agency is also another sign of his independence.

Plus, the president could desire to make more diversity history by nominating the first woman Fed chair — while leaving it to aides to rip Bernanke in background briefs to reporters. (“He was part of the Fed team that left rates too low for too long and failed to regulate Wall Street.” “Remember, he called the mortgage crisis a $100 billion problem.” “Bernanke was way too slow to ease in 2007.”) What’s more, Bernanke has to worry about a Congress where populists in both parties have been critical of his role in providing bailouts to Wall Street banks and AIG, as well as Bank of America’s takeover of Merrill Lynch.

So if Bernanke wants to keep his job, the PR campaign should continue. More TV interviews like the one he did on 60 Minutes in March. Maybe a televised town hall meeting in each Fed district. How about a Chairman’s Blog? And if we start heading into November and Obama still hasn’t renominated him? Two words: Oprah Winfrey.

13 comments

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To say that Mr. Bernanke is campaigning for himself personally is a gross mischaracterization.
Mr. Bernanke is campaigning for the Federal Reserve to keep its job.
The Fed is under pressure from HR1207 & S604. Audit the Fed then End it.

Posted by A. Fisher | Report as abusive

Personally, I do not care who the fed chairman is, it has no impact upon my life. Ben Bernanke is popular with Bankers, so they should elect the individual who has their best interests at heart. His campaigning is a mistake as it leads individuals to believe that they might influence the decission. Given the massive public derission of the banking community, the bankers banker would despite any town hall meetings not meet with any benefit from a popularity contest.

You can not be the acvocate of the ‘little guy’ when you have not put money in their pocket and given wall street insiders a record book bonus year, while ever-day-America faces 10% unemployment, deepening recession, increasing foreclosures, and no small business lending.

All in, Bernanke has saved the banks and flushed the people down a black hole.

Capaigning is a mistake, it gives room for objections.

I personally think he has done a fine job as Fed Chairman but I also think Hank Paulson did a fine job. They both represented their consituencies, which is decidedly – not me as an Invidual American.

Nothing personal but I don’t want to see any pre-crash face re-elected in banking governance and neither does anyone else.

which is exactly why he is campaigning.

To Mr. Harris- You don’t care who the Fed chairman is? I believe that you need to listen to some Peter Schiff and Ron Paul. The Federal Reserve chairman is your Presidents boss. The sooner American’s learn the Federal Reserve isn’t the least bit federal, and is placed higher than the White House, the better.

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” – Napoleon Bonaparte, 1815

Posted by Bryan Borenstein | Report as abusive

Do not tell us the any presidents chooses Fed’ chairman.

Posted by Dusan G. | Report as abusive

[...] >>>Source Article [...]

Bryan Borenstein:

You need to read up on your knowledge of the federal government. The Federal Reserve has nothing to do with the federal budget. The Federal Reserve has no say or control over the federal budget in any way – Congress has all of the power. And if you suggest the Fed might “punish” the government by raising it’s lending rates, that’s absolutely absurd as this would also be akin to suicide.

The Economic Theory of Ron Paul provides endless entertainment to actual economists.

Posted by Andrew | Report as abusive

Personally the only one I trust on Obama’s economic team is Sheila Bair. Bernanke and Geithner are both ex Goldman Sachs players. My opinion of Goldman betting against the poorly rated mortgage bonds it sold and bidding up the spot price of oil through future’s bidding, cashed out earlier future contrcts and made a killing when oil went to $140. That is price manipulation and against the law as seen by the Hunt brothers when they manipulated silver’s price. Whatever they do will be good for the banks, but will it be good for Main Street?

Posted by Jimbo | Report as abusive

The federal reserve was set up in 1913 by a special act of the national legislature called the Federal Reserve Act of 1913. It has thirteen governors that meet in secret to set monetary policy for the country. They are accountable to no one, and can only be removed for specified causes by impeachment by large majorities of both houses of Congress. They are a law unto themselves. The ghost of the old Baron Rothschild must laugh at out predicament. Remember it is he who said: “Let me set monetary policy for a nation and I care not who writes or approves of its laws.

Posted by joe | Report as abusive

And by the way. Banks are only as strong as its depositors. Now banks are now paying only a quarter of one percent per year in interest. This is a disgrace when one considers that inflation at about five percent a year means that 5- .25 = four and three quarters percent is what you are paying TO the banks to keep and to squander your money. Far better if you, all of you, would go to your banks and take all your money out. After all, the only thing ‘protecting’ your money is a really empty promise by the federal government to make you whole when the bank fails cuz it bought too many derivatives at the wrong time with your money. The Federal Deposit Insurance Corporation can make whatever promises it wants and Congress will let it about how great a sum it will make good in case of bank failures. The fact is, however, that the FDIC is underfunded to the tune of many billions of dollars, and the same Congress and President that said a quarter of a million was covered was the same one that refused to fully fund the FDIC. In truth, the FDIC funding is like designing dams and levys…you fund for disaster that you ‘realistically expect’. Three years ago, the present Great Depression redux of 1929-1940 was not even dreamed about in Bush’s nightmares. Take your money out of all the banks….while you still can!

Posted by joe | Report as abusive

Helicopter Ben needs close the pie hole and go back to the office and try to figure out how he’s going to shrink the feds balance sheet without causing a s storm. He and his fellow central bankers in the world need to stop “supporting” govt debt auctions and let this market actually correct itself. This false sense of stability is only delaying the pain and will certainly lead to a double dip recession.

LOL – ignorance is not bliss, so let’s correct all of the ignorance here.
1. Hank Paulson was not Fed Chairman, he was Sec’y of Treasury
2. Tim Geithner nor Ben Bernanke ever worked for Goldman Sachs (as if it would matter if they had)
3. The Fed is in charge of monetary policy (that is controlling the supply of money and credit in the economy)
4. The Treasury is in charge of raising funds and managing the cash flow of the federal government
5. Congress and the President are responsible for the federal budget and the deficits therein

OK, now, “Discuss”

Posted by Gary | Report as abusive

[...] is, at least to me, toe-curlingly embarrassing.  James Pethokoukis has a rather nice piece on it here.  In case you believe I am making this up (I wish I were), the Federal Reserve Board provides you [...]

Bernanke isn’t campaigning for himself. He is lobbying to keep the Fed approval rating from dropping any more than it already has. Banks were giving easy credit because the Fed artificially set interest rates low in the first place. Credit expansion is currently controlled by of the Fed.

The bubble was created by the Fed. Read: This is the Fed’s doing.

Posted by troy | Report as abusive

Dear James,

Stop by the Fed later today and pick up your check. You know, the one for the undeniably stupid article you wrote for Reuters today: “Ron Paul’s Fed plan is economic suicide.”

As always, brilliant pom pom laden statist types like you are forced to offer a much more muddled perception of the Fed’s thievery than the American people rightly possess. Such journalistic whoring is a part of your DNA.

Forget Humphrey-Hawkins, the Fed has operated where it desires to, in total secrecy. In stealth fashion, these elitist bankers have systematically destroyed the dollar, the American economy and protected it’s inside lackeys like Goldman, JP Morgan and others. Toss in the tech collapse and the housing bubble and I think there is ample reason to expose America’s taxpayers to Fed’s disgusting behavior.

Once the light is shined in the corn crib and the rats are forced to scatter like hell, the percentage of Americans who think the FED should be audited will rocket close to 100.

But of course central bank apologists like you will continue to pretend you know so much more. Get a life and tell the truth.

Pass HR 1207 and S604. It will be a promising beginning to a prosperous ending.

Posted by Skip | Report as abusive

Andrew:

It’s coming whether you like it or not. Right or wrong, the train of the past has left the station. Your side will lose. One is either on the train, or on the sidelines with railroad track markings on their back.

Posted by Chris | Report as abusive

[...] is, at least to me, toe-curlingly embarrassing.  James Pethokoukis has a rather nice piece on it here.  In case you believe I am making this up (I wish I were), the Federal Reserve Board provides you [...]