How Your Fed Sausage Gets Made
The Washington Post has a long profile of Ben Bernanke today, about how the Bearded wonder "staged a revolution" by being a soft-spoken thinking man open to hearing other people's ideas, who doesn't "pound on the table screaming" or call colleagues "jerks" if they don't agree with him.
According to Neil Irwin, Bernanke "has remade the Federal Reserve not in spite of his low-key style and proclivity for consensus-building. He has been able to remake the Fed because of it...whereas Greenspan once was briefed before policymaking meetings in ritualistic sessions with staff, Bernanke presides over sessions with more debate and discussion, often involving anyone on the staff with expertise on an issue rather than just top-level directors."
Even as the situation got progressively more tense, Bernanke not only continued rely on but all the more embraced his do-it together, let's-think-organically about this style. Though you were probably unaware at the time, much of the stuff that the Fed's come up with has originated from a I'm-completely-calm-but-putting-this-out-there, shit-is-hitting-the-fan-as-I-type, now-more-than-ever-I'm-open-to-anything, this-is-a-call-for-submissions email.
More than a few times over the past year, senior Fed staff members have logged into their e-mail accounts to find an unusual message. Subject: Blue Sky. Sender: Ben S. Bernanke.
The point of the e-mails has been to encourage them to think of creative ways that the Fed can guard the economy from the downdraft of a financial collapse.
This is an institution that not long ago could spend the better part of a two-day policymaking meeting deciding whether its target for short-term interest rates should be 5.25 percent or 5 percent. But in this crisis, rate cuts, the most common tool for helping the economy, have lacked their usual punch. The Fed already has dropped the rate it controls essentially to zero, meaning there is no room left to cut.
That's why Bernanke's Fed has been trying to dream up ideas out of the clear blue sky. The result has been 15 Fed lending programs, many with four-letter acronyms, most of them unthinkable before the current crisis.
Other invoked subject lines that didn't make it to print:
- The Best Think Outside The Box Idea Will Get A Trip Inside The Box Of His/Her Hill Staffer Of Choice At Close Of Business Monday
- Nothing Is Too Stupid Tuesday
- The First Person To Come Up With Something Today Gets The Contents Of My Wallet Wednesday
- It's Hawaiian T-shirt And Pull A Solvency Idea Of Your Ass Thursday
