mises.org / Ryan McMaken / March 4, 2017
In recent years, the Fed has felt the need to step up efforts to defend its governing structure and its agenda. Thanks to the the success of the anti-Fed rhetoric of the Ron Paul campaigns of 2008 and 2012, combined with the financial crisis of 2008, the Fed has directly engaged the public more and more:
What followed [the Paul campaigns and the financial crisis] was several years of declining legitimacy for the Fed as a growing number of people began to understand what a central bank is, and what it does — and as the US went through the worst recession in decades. The public began to understand also that the Fed functions primarily out of the public eye — and without any meaningful accountability — while making decisions that can have an enormous effect on public policy and the economy.
By March 2011, the Fed capitulated and began to hold regular press conferences for the first time in its history. According to the Fed’s press release at the time: “The introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve’s monetary policy communication. The Federal Reserve will continue to review its communications practices in the interest of ensuring accountability and increasing public understanding.”
The Fed says that sort of thing because it has to, but it would obviously engage the public as little as possible, if it had the choice. After all, if it did want to engage the public, it could have introduced press conferences decades ago. It’s not as if the White house just started doing press conferences a few years ago, and now the Fed has decided to give this new-fangled thing a try.
Included among these efforts at self-rehabilitation has been efforts by the Fed to highlight its governance structure as somehow being representative of the public at large. We are told this is made possible through the Fed’s allegedly decentralized structure in which representatives from the Federal Reserve System’s member banks are able to have a say in policy formulation.
In practice, the Fed is dominated by interests out of Washington and New York