The Bernanke Blues

“Are Bernanke and Co. losing faith?” asks a headline atop the front page of the Financial Times. It runs with a picture of the chairman of the Federal Reserve as he stares at a headline that says: “Central bank blues.” The scoop is by Robin Harding and Christopher Giles and runs inside the paper with yet another headline, which says: “As central bankers begin to doubt that their activist policies still have the power to boost demand, some economists are starting to call for radical new measures.”

The FT makes it clear enough that at least some of the leading central bankers are suffering from a drooping self-esteem. “I am a little — maybe more than a little bit — worried about the future of central banking,” it quotes the president of the Federal Reserve Bank of St. Louis, James Bullard, as saying.  “We’ve constantly felt that there would be light at the end of the tunnel and there’d be an opportunity to normalize but it’s not really happening so far.” What seems to be worrying Mr. Bullard turns out to be what he characterizes to the FT as “creeping politicization.”

What passes for radical new measures at the FT, however, is thin gruel. No mention of the kind of ferment that is going on in the Congress and in the Republican Party. The bill to audit the Fed, which is the premier expression at the moment of the political dissatisfaction at which Mr. Bullard bristles, is not mentioned in the FT. Nor is the fact that the Republican Party has just sent its candidate for president onto the hustings with a platform calling for a new gold commission. Nor any mention of the fact that the nominee, Governor Romney, has pointedly said that if he’s elected, he’ll seek a new chairman of the Fed.

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