Fed staff in trouble, but cited for raise, too
Fed staff stock plunged on Wednesday when they put their boss in an awkward position during Bernanke’s testimony before Congress on the financial bailout and efforts to stabilize the swooning economy.
Rep. Scott Garrett testily reminded Bernanke that he was still waiting for answers for a letter he sent in December.
“We need to move on some of these issues,” Garrett said.
“You have not received a reply?” Bernanke asked, sounding surprised.
When Garrett said he had not, the Fed chairman took time out from discussing the narrowly averted global financial meltdown to assure the lawmaker he would crack down on his wayward staff.
“After some concerns about this, I have asked staff to try to put a one-month limit on (response) time. And so, clearly, that has not been met in this case, and I will check up on the situation,” Bernanke said.
Later, however, Fed bureaucrats received a sort-of compliment from Rep. Michael Capuano, who was upset the government has yet to make clear how it plans to purge the financial system from assets that have lost value because they are linked to delinquent mortgage loans.
Capuano marveled that the government now calls them “legacy” assets instead of “toxic” assets.
“It’s a good term,” Capuano said. “Whoever made it up, give them a raise, because it sounds much better than toxic assets.”
Bernanke could not suppress a smile.
Will that encourage officials to start calling bank nationalization “pre-privatization,” as some observers have suggested?