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Secretary of the Treasury Timothy F. Geithner (L) and William C. Dudley (R), President and Chief Executive Officer of the Federal Reserve Bank of New York, listen to Federal Reserve Chairman Ben S. Bernanke (C) speak during a hearing of the House Financial Services Committee on Capitol Hill March 24, 2009 in Washington, D.C.
As Bloomberg reports, the Federal Reserve is trying to change its image. And the chief image-changer is none other than Chairman Ben Bernanke:
Bernanke, who took office in February 2006, has pushed the Fed toward greater openness at a faster pace than any of his predecessors. He holds press conferences four times a year and has aired his views on monetary policy and the financial crisis in television interviews.
The 58-year former Princeton University professor has also traveled to town hall meetings in locales such as El Paso, Texas. In addition, the FOMC publishes its forecasts four times a year, compared with two under former Fed chairman Alan Greenspan.
This is absolutely the right thing to do. Most Americans have no earthly idea what the Fed does, so Bernanke's new push for transparency isn't just good for the institution, it's good for the public.
It also addresses some long-held fears about the Fed — basically, that the central bank calls its own shots, completely free from oversight. In the Nation, William Greider (who wrote an entire book about the institution, "Secrets of the Temple: How the Federal Reserve Runs the Country") perfectly articulated the Fed's challenge back in 2009:
This awkward reality explains the dilemma facing the Fed. It cannot stand too much visibility, nor can it easily explain or justify its peculiar status. The Federal Reserve is the black hole of our democracy--the crucial contradiction that keeps the people and their representatives from having any voice in these most important public policies. That's why the central bankers have always operated in secrecy, avoiding public controversy and inevitable accusations of special deal-making. The current crisis has blown the central bank's cover. Many in Congress are alarmed, demanding greater transparency.
And so Bernanke is delivering it. But is he doing it in the interest of real transparency — or to preserve the core of the "old," pre-crisis Fed?
It remains to be seen. But given how important the central bank has become in preventing the U.S. economy from falling into a second Great Depression, he should probably be given the benefit of the doubt for a little while longer.