Tales from the Trail

Has hell frozen over? Are pigs flying? Is the sun rising in the West?

Don’t rub your eyes, it’s real. The Federal Reserve chairman, that oracle of monetary policy, will hold FOUR news conferences a year.

The first will be on April 27 after a two-day FOMC meeting. It marks the first time in the nearly 100-year history of the central bank that a Fed chief will deign to hold a regular media briefing. It’s almost too tantalizing to contemplate.

After years of reading the tea leaves following these monetary policy setting meetings, reporters will actually get to ask questions of Fed Chairman Ben Bernanke immediately after THE DECISION is made.

We’re guessing it would be a bit too much to expect that he would give a thumbs up or down to indicate which way rates are going, but we can now ask him THE QUESTION (and then parse the answer).

Bernanke-speak tends to be a bit clearer than Greenspan-speak, but all Fed chairmen are adept at obfuscation when required.

Now that the midterm elections are history, Sarah Palin is setting her sights and rhetorical skills on the Federal Reserve and its easy money policy.

On Twitter, the former Alaska governor and possible 2012 presidential contender said she would begin a round of discussions at school events to teach children about quantitative easing to prepare them for the results of the Fed’s plan to boost the sluggish U.S. economy.

“Today:trade speech;tmrw school event 2 start discussing QuantitativeEasing w kids around US so they prepare 4 Feds experiment w their future,” Palin tweeted.

Congress might not get much done in the next two years, but boring it won’t be. Certainly not with Ron Paul as likely head of the monetary policy (aka Fed oversight) subcommittee in the House.

Today, Paul the elder told Reuters correspondent Andy Sullivan that he was looking forward to his new “very, very important” role. The Fed, he said, was ”way too independent” and “totally out of control.” Quantitative easing – the Fed’s controversial program to purchase government securities – is not just lousy economics and lousy monetary policy, he said, it is “central economic planning at its worst.” More here.

Expect more fireworks from other conservative Republicans in the coming Congress, people who believe the Fed is enabling excessive government borrowing through its purchases of government debt, that it is printing money to finance the deficit. Then there is Darrell Issa, likely head of the oversight committee, with the subpoena power to be at least as much of a thorn in Ben Bernanke’s side than either of the Paul clan. It will be interesting to see if any of them can get under the skin of the normally unflappable Fed chairman.

After irking the Chinese with the award of the Nobel peace prize last week, the Nobel committee set a few feathers flying in Washington today by awarding the economics prize to Peter Diamond, an MIT professor who has also been nominated by President Barack Obama for a spot on the Board of Governors of the Federal Reserve.

Diamond’s nomination to the Fed job has been held up by Senate Republicans who have questioned his qualifications. At the time Richard Shelby, the most senior Republican on the Senate Banking Committee said the current uncertain environment would not benefit from board members deciding monetary policy “who are learning on the job” and told Reuters Diamond was a “behavioral man” who had no background in monetary policy and the economy.

It is a probably little conspiratorial to suggest the Nobel committee was deliberately tweaking Republican noses by recognizing Diamond along with two other leading economists for their work in helping to explain unemployment and jobs markets. Nevertheless, critics are bound to seize on this, along with Obama’s peace prize last year and Paul Krugman’s economics prize in 2008, to draw their own conclusions.