As if Ben Bernanke's job were not already stressful enough, he is now finding his name dragged into the political fray, an unusual place for the chairman of the Federal Reserve to be.
Texas Gov. Rick Perry famously and indelicately attacked Bernanke earlier this week, at a campaign stop in Iowa. "If this guy prints more money between now and the election, I don't know what y'all would do to him in Iowa but we would treat him pretty ugly down in Texas. I mean, printing more money to play politics at this particular time in American history is almost treacherous, er, treasonous in my opinion," he said. Perry's comments attracted a lot of attention, but he is not the first 2012 GOP candidate to publicly criticize Bernanke. At a House Financial Services Subcommittee on Monetary Policy hearing in July, Texas Rep. Ron Paul argued with Bernanke on a number of points and criticized government bailouts of financial institutions. For better or worse, the man at the helm of U.S. monetary policy is now part of the 2012 presidential nomination storyline.
Ben Bernanke is certainly not as well known as many of Washington's other powerful entities, and many voters have not formed firm opinions about him. In a June Bloomberg poll, 30 percent of Americans said they viewed the Fed chair favorably and 26 percent said they viewed him unfavorably. Both of those groups are far outnumbered by the 44 percent who were unsure. But Perry's comments could affect public perception, even among those with little knowledge of the intricacies of Fed policy. "People don't necessarily know who Bernanke is, but to the extent that they know something about him [they think], 'Oh, he's in Washington, he's part of something to do with our money system,'" says Jon McHenry, Republican pollster and partner with Ayres, McHenry & Associates. McHenry says that taking a shot at Bernanke could be considered "symbolic," then, as a way for a candidate like Paul or Perry to show that he is against Washington. "It's easy to run against Washington at this point," says McHenry.
Though the Fed has typically maintained a low profile politically, it has not been entirely immune from criticism by politicians. President George H.W. Bush blamed Alan Greenspan, who chaired the Federal Reserve from 1987 through 2006, in part for his reelection loss in 1992. Bush believed that under Greenspan, the Fed did not lower interest rates sufficiently to stimulate the economy after the early-1990s recession.
Greenspan was a popular figure through the boom years of the late 1990s, but now, many economists blame Greenspan's later maintenance of low interest rates in the early-to-mid-2000s for encouraging speculation that led to the most recent recession. In a 2008 congressional hearing, Greenspan denied responsibility for the crisis but admitted that the chaos in finance and housing revealed flaws in his anti-regulation, pro-free-markets economic philosophy.
This time around, the more visible Fed, targeted by political candidates, is without a doubt a consequence not only of economic uncertainty but also of widespread discontent with Washington that have changed the political status quo. Unprecedented economic problems have warranted drastic moves by the Fed, like quantitative easing, that have drawn criticism from those who advocate a tighter monetary policy.
However, it is important to note that Bernanke has also taken small steps toward making himself more visible, in the hopes of creating a more transparent and accountable Fed. Most notably, he now holds press conferences after some meetings of the Federal Open Market Committee. Bernanke also put himself in the spotlight in December by granting a rare interview with CBS's 60 Minutes.
Though he is the face of the Fed, it is not a politically smart move to make Fed criticism personal, says Kellyanne Conway, president of Republican polling firm The Polling Company. "Voters generally want to hear you talk about issues, not individuals; policies, not personalities," she says. While it is valid to question the wisdom of the Fed's policy moves, Perry in particular has gone about it in an unproductive way, says Conway: "Governor Perry used unartful and unnecessarily personal language to stir what is a very important debate in 2012 presidential politics—namely, sound economic policy."