Federal Reserve spreads its PROPAGANDA in South Florida
(MIAMI HERALD) The Federal Reserve is dispatching economists to talk about the central bank’s efforts to address the national financial crisis. One of them spoke in Broward on Thursday.
The Federal Reserve wants the public to know it’s not fiddling while the economy burns.
”We’ve got to go out and tell people what we’re doing,” said Thomas J. Cunningham, an economist and vice president of the Fed’s Atlanta branch, after speaking to the Tower Forum, a Fort Lauderdale business group, Thursday morning.
Cunningham’s speech contained no surprises — he predicted modest economic growth will resume later this year, for instance.
But his appearance was part of a concerted effort by Fed officials to communicate their efforts to restore the flow of credit and get the economy moving. Since human psychology can have a big influence on financial markets, the Fed also wants to project an image of active engagement in solving problems.
Atlanta District officials have given 69 speeches in the first quarter of this year, or twice as many as the same period in 2008, a spokeswoman said. Cunningham had another speech scheduled for Thursday evening in Miami, and Fed Chairman Ben Bernanke recently appeared on CBS’ 60 Minutes.
The Fed’s new programs to stabilize credit markets include steps such as agreeing to lend to some non-bank financial companies and a plan to help investors buy mortgage-backed securities.
On Thursday, Cunningham said the economy remains ”fragile” and vulnerable to unexpected shocks.
But in laying out the Fed’s programs to promote lending, he also pointed to some reasons for hope. He said the housing market seems to be nearing a bottom and predicted consumer spending will soon stop falling because people still need to buy essentials.
”You don’t cut your consumption down to zero,” Cunningham said. “This is not something that’s going to last forever.”
He predicted modest growth in the economy after this summer, which is also what many private and academic economists have been saying. Florida is expected to recover somewhat more slowly than the nation as a whole, however.
The Federal Reserve is the nation’s central bank. It is supposed to be apolitical, and its chairman and board members are appointed by the president for 14-year terms.
The Fed serves several purposes, notably setting certain bank-to-bank interest rates and regulating bank holding companies. These functions are essential for banks to operate.
Over the last few months, working closely with the Treasury Department, the Fed has been a prominent player in the government’s efforts to solve mounting problems in the finance industry.
The Fed’s higher profile is deliberate.
Bernanke, an expert on the Great Depression, has made it clear that he thinks government and central-bank inaction made the 1930s economic disaster worse.
Cunningham said the Fed should have made money more readily available back then.
”Chairman Bernanke will not make that mistake again,” he said.
“He will make a whole new set of mistakes.”