November 9, 2011 / 10:30 PM / in 7 years

Fed focus: Bernanke heads to Texas, hopes it won't get ugly

WASHINGTON (Reuters) - Is it going to get ugly at Fort Bliss?

Federal Reserve Chairman Ben Bernanke pauses during a news conference following a two-day policy session in Washington November 2, 2011. REUTERS/Jason Reed

Federal Reserve Chairman Ben Bernanke takes his case for bold monetary action to boost growth deep into the heart of Texas on Thursday where some of his harshest critics reside.

Bernanke’s decision to participate in the town hall event at an Army post outside of El Paso is only his second since taking the helm at the Fed in 2006. The appearance is a rare and strategic move aimed at helping to insulate the central bank from politics by building popular support.

One Texas congressman wants to abolish the institution Bernanke heads, while the governor speculated Texans might treat the central bank chief “ugly” because of the Fed’s loose monetary policy. Both are Republican presidential candidates.

Appearing a day after a big drop in stocks on worries about a deepening of the European sovereign debt crisis, Bernanke may need to make clear that the central bank stands ready to prevent those problems from washing up on America’s shores.

However, the Fed chairman’s expected audience of about 175 soldiers and their families is more likely to want reassurances about issues of more personal concern, including whether their homes will retain value and their futures will remain secure.

“I don’t think that the local people, the local military are going to treat him badly,” said William Doyle Smith, an economics professor at the University of Texas, El Paso.

Still, they will have some tough questions, he said.

“There’s a general unrest and a general lack of confidence right now, whether it’s Washington or whether it’s Congress. People are concerned. They’re uncertain about what the future will bring,” he said.

Republicans have sought to tap that unease with attacks on the central bank, some personally directed at Bernanke.

One Republican presidential candidate, Representative Ron Paul, wants to shutter the Fed. Two others want to replace Bernanke. A fourth, Texas Governor Rick Perry, has equated the Fed’s aggressive easing of monetary policy to treason.

“If this guy prints more money between now and the election, I don’t know what y’all will do to him in Iowa, but we would treat him pretty ugly down in Texas,” Perry told supporters in August.

Bernanke, who has pledged a revolution in Fed openness, held his first town hall in July 2009 when anger at the central bank’s efforts to bolster banks was on the boil. He has also appeared on the television program “60 Minutes” twice and earlier this year launched a program of regular news conferences.

Since the Fed is a creature of Congress, its charm offensive could help protect it from lawmaker meddling.

But how successful it will be in taming popular anger remains to be seen.

“There’s enough unhappiness at the conduct of Fed policy that the only place he can go is an Army base,” said Walter Todd, an attorney and economic consultant who has worked in the Fed system. “If you work on Main Street, you have every reason to be upset because it appears Fed policy is doing nothing for you.”

Reporting by Mark Felsenthal; Editing by Kenneth Barry

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below