Bernanke Gives Rare TV Interview
Monday, March 16, 2009
Ben S. Bernanke last night ventured to a place few Federal Reserve chairmen have gone before: In front of TV cameras, for an interview.
The last time a sitting chairman of the secretive central bank did a television interview was Alan Greenspan's 1987 appearance on NBC's "Meet the Press." Last night on CBS's "60 Minutes," Bernanke was confident in the long-term outlook for the U.S. economy, argued strongly that bailouts of financial firms are essential to protect ordinary Americans, and voiced some populist outrage at the actions of financiers who got the nation into its current mess.
"I come from Main Street," Bernanke told correspondent Scott Pelley, while on the central drag of Dillon, S.C., where Bernanke grew up and his father owned a drugstore. "That's my background. And I've never been on Wall Street. And I care about Wall Street for one reason and one reason only -- because what happens on Wall Street matters to Main Street. And if we don't have stabilization in the financial markets, if we don't take the steps necessary to make sure that credit is flowing again, then my father couldn't get a loan to build his new store."
Before Congress passed the $700 billion financial rescue package, Bernanke told Pelley, the world was "very close" to global financial meltdown. During the debate over the package in September, when a congressman told Bernanke that bankers and businesspeople in his district hadn't seen any ill effects of the crisis, the Fed chairman replied, "you will."
Bernanke did not shed new light on the future of the central bank's policies. Instead, he directed his message at ordinary Americans, using unusually plain language to try to inspire confidence and bolster support for the rescue of the financial system.
Bernanke has taken on a more conversational, sometimes even jaunty tone in recent speeches and congressional testimony, which continued in the "60 Minutes" interview. For example, normally Fed officials speak of "increasing reserves" as their technical language for what ordinary people would call "printing money." Bernanke was more blunt in the TV interview, saying that the Fed is effectively printing money to boost lending and stimulate the economy.
The appearance also seemed designed to show Americans his human side. Where Fed chairmen traditionally try to maintain aloofness and mystique, Bernanke discussed his mother's concern about him being so far from home when he was admitted to Harvard as a teenager, said he learned the importance of hard work when he waited tables to help pay for college and admitted to spending a few nights on his office couch in recent months.
Speaking about bankers who received multimillion-dollar bonuses while their companies drove the economy into the ditch and have required government aid, Bernanke said that "the era of this high living, this is over now. And that they need to be responsible and use the money constructively." He added that they need to "have a reasonable sense of humility" based on the events of the last 18 months.
By tradition, Fed chairmen do not do on-the-record media interviews -- a tradition Bernanke has generally held until now. The rare exceptions are usually short quotes in major articles such as a 10,000-word New Yorker profile of him published last year.
But Bernanke has sought to make the Fed more transparent. Just last month, he took extensive questions at the National Press Club, a setting that was as close to a news conference as a Fed chairman has ever come.
In the lengthy segment last night, Pelley said, "when I called and proposed this interview about a year ago, your representative laughed out loud and said, 'The Fed chairman never does an interview.' I wonder: Why are you doing this?"
"Well," Bernanke replied, "it's an extraordinary time. It's an extraordinary time. This is a chance for me, I think, to talk to America directly."
America might hope it goes over better than Greenspan's 1987 appearance on "Meet the Press." The following week, the stock had its largest single-day drop in history.