Congress, Fed work out marital issues
Federal Reserve Chairman Ben Bernanke testifies before the Joint Economic Committee on Capitol Hill -- May 5, 2009
TEXT OF STORY
Steve Chiotakis: Federal Reserve Chairman Ben Bernake been taking a little fire lately from foreign leaders, from the press, and yesterday from members of Congress upset about the Bank of America-Merrill Lynch merger. But Bernanke's getting some help for his relationships on Capitol Hill. Here's Marketplace's Steve Henn.
Steve Henn: One way to think about the relationship between Congress and the Federal Reserve: its kind of of like a modern marriage. Congress and the Fed are supposed to be independent and do their own thing. But for this arrangement to work, communication is key.
Vincent Riehnhart: One message from relationships is if you don't manage it well, little things could turn out to have very big consequences.
Vincent Riehnhart was a senior economist at the Fed for years. He says yesterday's hearing on the central banks' role of financing the shotgun merger of Bank of America and Merrill Lynch was the equivalent of a marital spat. Just listen to Ben Bernake trying to answer a question from Ohio Congressman Dennis Kucinich:
Ben Bernake: We have made demands of the Bank of America . . .
Dennis Kucinich: So you give them the money first, and then you start supervising?
Who hasn't been there? Money troubles can strain even the best relationships.
Alice Rivlin: I think the Fed needs help.
Alice Rivlin was vice-chair of the Fed in the 90's:
Rivlin: None of us appreciated what the Fed would have to do in a crisis of this magnitude.
And she says Bernake needs to explain himself and his policies to Congress. To help, the Fed's hired a former lobbyist, Linda Robertson, as its new congressional liaison.
Rivlin: Oh Linda's very good -- she knows the Hill, she knows financial issues. She will be terrific in this job.
And Robertson's been around the block more than once when it comes to rocky relationships with Congress. Eight years ago, she ran lobbying for Enron.
In Washington, I'm Steve Henn for Marketplace.