- The Washington Times - Monday, March 30, 2015

ANALYSIS/OPINION:

“When I was at the Federal Reserve, I occasionally observed that monetary policy is 98 percent talk and only two percent action,” observes Ben Bernanke, who served as chairman of the Federal Reserve from 2006 to 2014. The economist may encounter a different landscape now that he’s agreed to write a blog for the Brookings Institution, where he is a fellow. The press took quick notice that Mr. Bernanke had broken his silence, going after critics and even tweeting.

“The ability to shape market expectations of future policy through public statements is one of the most powerful tools the Fed has. The downside for policymakers, of course, is that the cost of sending the wrong message can be high. Presumably, that’s why my predecessor Alan Greenspan once told a Senate committee that, as a central banker, he had ‘learned to mumble with great incoherence’,” Mr. Bernanke says, on announcing his new creative outlet.

“Now that I’m a civilian again, I can once more comment on economic and financial issues without my words being put under the microscope by Fed watchers. I look forward to doing that - periodically, when the spirit moves me - in this blog. I hope to educate, and I hope to learn something as well. Needless to say, my opinions are my own and do not necessarily reflect the views of my former colleagues at the Fed,” the new blogger reports.

He joins 14 other blogs, asking in his inaugural entry, “Why are interest rates so low?”, complete with a chart and many numbers.

“The state of the economy, not the Fed, is the ultimate determinant of the sustainable level of real returns. This helps explain why real interest rates are low throughout the industrialized world, not just in the United States,” Mr. Bernanke explains.

It is not “dry text,” noted Bloomberg Business columnist Lorcan Roche Kelly. “Civilian Bernanke is not chained by the polite politics of high federal office anymore, and is willing to use his freedom to take some shots at his longtime critics. Bernanke’s first appears to be aimed at Senator Bob Corker, Tennesee Republican, among others.”

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