Apr 282011
 

The historic first ever Federal Reserve press conference delivered even less than the little that was expected.

That was in part because Fed chair Bernanke is good at making economic policy boring and opaque.

After all, that is his job.

But the reporters who cover the Fed have no such excuse.

At the press conference, they shared none of the outrage that continues to be expressed by the rabble outside Washington who are upset by the Fed’s bailout of big banks, and who fought to make the agency more transparent.

The whole thing had the flavor of a rote exercise, featuring people who appeared to be sleepwalking rather than covering the secretive agency that handed out trillions to the financial industry with no questions asked.

There was no skepticism, no appearance that the reporters had done their homework to challenge the Fed’s behavior in boosting banks while abandoning working people. There was none of the excitement that reporters worked up for the non-story of Obama’s birth certificate.

The press conference confirmed what we already knew: federal authorities, including Bernanke have abandoned the unemployed. They’ve moved on. Although employment is one of two of Bernanke’s mandates, he insists his hands are tied.

The reporters participating in this historic occasion treated the bailout as old news. Somehow they managed to miss that every time the Fed provides information about its actions in the bailout, it raises more questions than it answers.

Thankfully, not everybody in Washington shares this view. Sen. Bernie Sanders, the independent socialist from Vermont who caucuses with the Democrats, has been doing his best to dog the Fed.

A day before Bernanke held his press conference; Sanders released the results of a study he ordered from the Congressional Research Service of the Fed’s secret lending program. That study showed how the big banks gamed the bailout, profiting from investing the low interest loans the Fed gave them rather than loaning the money to businesses to get the economy going.

Sanders put out a press release with a catchy headline –  “Banks Play Shell Game With Taxpayer Dollars.” This wasn’t enough to rouse the reporters who cover the Fed; nobody could be bothered to ask Bernanke about it as his press conference. According to the research service, the banks pocketed interest rates 12 percent greater than the low-interest emergency loans the Fed was giving them. The purpose of this emergency loan program had nothing to do with enriching bankers; it was justified only because we were told it was the only thing that would get the economy going.

It’s worth remembering that Bernanke and the Fed fought a losing battle against the release of any details about its secret lending program. You would have thought the reporters would have welcomed the opportunity to subject Bernanke’s decision-making to public scrutiny.

 

 

 

 

 

About Martin Berg

Martin Berg, WheresOurMoney.org editor, is a veteran journalist.

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