ARI SHAPIRO, HOST:
The chairman of the Federal Reserve, Ben Bernanke, reflected yesterday on the lessons of the financial crisis, and he suggested that the central bank could do a better job communicating with the public. Mr. Bernanke does not seem to be very successful at communication these days. So to find out why, we turn to David Wessel, as we often do. He's economics editor of The Wall Street Journal and a regular on this program. Morning, David.
DAVID WESSEL: Good morning.
SHAPIRO: So why are the Fed and its chairman so unpopular these days?
WESSEL: Well, you're right. They are unpopular. I mean although he didn't come up in the presidential debate that the Republicans had last night, they've all promised to replace him, even though they can't actually fire him. His term runs to 2014 and there's no sign he wants another four years. You know, the Gallup poll does these regular polls asking people about different institutions. More than 40 percent of Americans say they have a little or no confidence in Mr. Bernanke, which is worse than his standing during the worse days of the financial crisis and puts him in the same lousy neighborhood as members of Congress. And now we see this Occupy the Fed movement - Occupy Wall Street movement - and some of them are carrying signs that say end the Fed.
I think there are a couple of reasons for this. One is that the economy simply isn't very good and the Fed's getting the blame. The other is that Mr. Bernanke is associated with the very unpopular Obama and Bush bailouts of Wall Street and the Republican candidates know that people are against doing that again and Mr. Bernanke is one way that they can signal their displeasure.
SHAPIRO: I'm a little surprised to hear that that many Americans know who Fed Chairman Ben Bernanke is. What would they have him do differently?
WESSEL: Well, about 20 percent said they didn't have any opinion, so that's a good point.
(SOUNDBITE OF LAUGHTER)
WESSEL: Usually politicians want the Fed to make credit easier, to cut interest rates. A number of Republicans have surprisingly been asking him to do just the opposite - to leave the economy alone. They just don't think the Fed medicine will work and they worry about the side effects. The end the Fed crowd - Congressman Ron Paul and some of the Occupy Wall Street protesters - have a somewhat more radical agenda. They'd like to do away with the Fed, do away with paper money and go back to the gold standard. And some other people think the Fed is simply not being tough enough on the big banks that after all caused the financial crisis that we're still suffering the aftershocks from.
SHAPIRO: Given that the Fed is not likely to go away, do you think that this criticism is likely to make the Fed more reluctant to do unpopular things that might be necessary to help the economy?
WESSEL: It doesn't make it any easier. Mr. Bernanke repeatedly has insisted he'll do what the law tells him to do - use his power to get as close as he can to maximum employment and price stability. But I think like any Fed chairman, he has to worry about eroding the Fed's cherished independence and losing the confidence of Congress. One thing I think it is doing is making him reluctant to speak out more forcefully about what he thinks Congress and the White House should doing now on taxes, spending and housing, because he doesn't want to draw even more sniping from the politicians.
SHAPIRO: Now, the Fed has a mandate to keep inflation down. How significant an issue is that right now?
WESSEL: It's an issue but not very big one. Inflation is roughly in line with the Fed's target. It hasn't come down as much as some Fed officials expected. Some, a minority of Fed officials, think more inflation is around the corner. But Mr. Bernanke and most of his colleagues don't, so they're more focused on doing what they can do to give the economy a boost and get unemployment - 9.1 percent - down. But they're divided. Three people didn't want to do what the Fed did at the last meeting, and the minutes say at that least two people wanted to do even more than the Fed did.
And I think one issue is that the Fed has to decide if the rest of Washington is paralyzed, should the Fed do more than it otherwise would to help the economy? And the moment, Mr. Bernanke's answer to that seems to be a cautious yes, they should.
SHAPIRO: All right. That's David Wessel, economics editor of The Wall Street Journal and a frequent guest on MORNING EDITION. Thanks, David.
WESSEL: Your welcome. Transcript provided by NPR, Copyright NPR.