Notice & Comment

Should the Former Fed Chair Speak?

The econ blogosphere is alight with the news that former Fed Chair Ben Bernanke is now blogging.

While I may engage the substance of his posts in this space, I want to comment on his striking choice to blog at all. In a Q&A at Brookings earlier in the month, a journalist asked Bernanke for any thoughts on the current monetary policy landscape. The question seemed almost rude, and Bernanke somewhat stiffly answered by saying “I don’t comment on monetary policy.” The moderator, David Wessel, laughingly told the journalist “Nice try” immediately afterward.

The idea here is that former Fed Chairs should respect the institution by refraining from conducting a shadow monetary policy that could undermine his successor and the democratic process that put him there. In the more than a year since his retirement, Bernanke has had a lot to say; but criticizing his successor hasn’t been on his list. Don’t expect his blog to change the course.

But while Bernanke is unlikely to liveblog Janet Yellen’s next press conference, his response to the journalist isn’t exactly correct. As his first post shows, he is commenting—thoroughly, clearly, and in defense against critics—on current monetary policy. I’m glad he is—Bernanke’s work on monetary policy before his Chairmanship was among the most astute of academic commentators. His essays on the Great Depression are an iconic text in economic history, and his article with Vincent Reinhart and Brian Sack on monetary policy at the zero bound is clear and almost eerily prescient in light of subsequent events. It will be very useful for scholars, central bankers, and others to have his voice in the mix.

The question of Bernanke’s voice will get more interesting if the Fed under Yellen or a successor moves policy in a direction with which Bernanke profoundly disagrees. Other Fed Chairs haven’t always held their tongue. Paul Volcker was deeply critical of the Bear Stearns bailout, for example. Will Bernanke do the same? I have doubts, given the differences in his leadership style from Volcker or, say, Alan Greenspan. But there are criticisms and there are criticisms. If Bernanke’s blog remains an intellectually serious place to discuss monetary policy, criticisms of big developments will be inevitable, even if they aren’t directly, personally critical.

To answer the question in the title, yes—the former Fed Chair should speak. His perspective as a scholar and practitioner are too valuable to silence completely, and his commentary while he explains and defends the context that led to the Bernanke—and Yellen—Fed’s actions will be uniquely valuable. Whether and how and when he articulates his differences with current decisions will be well worth watching.

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