Fed Chief Needs An Understanding of Media – He Is Freaking Out Investors
It is obvious that the Federal Reserve Chief has little understanding of how to communicate in fast-paced media environments. His public comments are good and transparent, but his STYLE makes him look indecisive and not in command. That, along with the President’s decision to travel and therefore prolong a stimulus package, makes it apparent that no one in Washington gives a hoot about the dangers to the economy. And you can put the Democratic Congressional leadership in that camp. These people are the Slowsky’s of economic policy.
I mean, give me a break. It will take months before a stimulus package goes into effect. Most economists say it is too late. Talk about a Bush legacy? Where’s the beef?
In the meantime, a majority of Americans have something. either IRA’s or 401 plans that are impacted by stocks. As the market declines, people, feeling less wealthier or a lot poorer, stop purchasing discretionary items. I am not a financial adviser, but I understand the nuances of communication and the sense of duty that our leaders have toward the economy.
The sense of urgency for a solution is not there, yet. The Federal Reserve Chairman, although earnest and well-meaning needs to be more decisive.
The President, while admitting challenges, still thinks the economy is in good shape. This is scary, in itself. That’s why they made the FED independent of all governments. Meantime, Mr. Greenspan is telling the truth and insisting on action.
If we are not in recession, then there a feeling that we might. The psychology of that sensitivity is enough to cause anxiety for a lot of Americans.
Comments(3)
They should get Alycia Lane to be his public face. She’s a great talking head. She understands the media: it’s all surface and no content. Empty head and passable face.
Larry,
Mr Bernanke could improve his communication skills, but he recently made clear that the Fed will be more proactive with monetary policy and in fact may need to ease before the January 30th meeting. Now, after the subprime disclosures, the insurers of corporate debt and municipal bonds such as MBIA and AMBAC are on the brink of insolvancy, which could spark futher panic by investors, possibly worse than the subprime carnage to date.
However, the idea that Mr Greenspan is a truth teller is insane. He went on 60 minutes to promote his book and openly admited he talked in riddles to Congress to in effect say nothing, he actually thought it was funny. The economic mess we are in is directly linked to Greenspan’s policy of keeping rates too low for too long, and that caused the housing bubble (wall street also poured fuel on it with leveraging CDOs and other mortgage products). The Fed always had the power to crack down on shady lose lending policies by banks, but chose to do nothing in 2005 when the problem was evident. Greenspan presided over the NASDAQ bubble in 2000, and when that crash went to so called safety in real estate, Greenspan provided 1% money and a blind eye toward irresponsbile lending that he could have acted upon, the Fed has the authority to tighen lending standards and effectively controls liquidity in the banking system. Greenspan is so obsessed with his own legacy he feared removing the punch bowl on his watch. Now things are so screwed up, if Bernanke eases too quickly the dollar will crash and all of the Asian and Middle East money that is bailing out Citi, Merrill and others will dry up. Bernanke is in a tough position and the blame lies fully on the shoulders of Greenspan who is now whoring himself to the highest bidders in the private sector to cash in on his mystic, which when economic history is finally written will be that Greenspan primarily caused this mess.
Greenspan is the kind uncle that could never say no and wants to be liked. Uncle Ben, is the strict intellectual disciplinarian who knows what’s best for us in the long run, but in the short run there will be pain from the economic hangover caused by Uncle Alans wild party.
Larry,
I know this would be disastrous for the countries of the world that we send free money to but;
If the USA said “Sorry but for two years the money we send abroad is going to be put to use in the USA.”
We are going to use it for jobs, infrastructure, fight crime and drug control we might be better off in the long run.
Just a thought