The Associated Press has distributed an article critical of Fed Chairman Ben Bernanke entitled "Bernanke On Perilous Ground For Fed Chairman." And what, according to the AP, has put Bernanke on shaky ground? No, not the Fed's actions during the financial crisis. Rather, the fact that Bernanke recommended Congress pass more stimulus aid in order to reduce unemployment.
The AP suggests that by appearing before Congress and advocating additional fiscal stimulus, Bernanke did something unprecedented for a Fed Chairman:
What's different this time is that a Fed chairman has struck back at both Congress and other countries in a highly public manner... Bernanke — a Republican himself — shifted the focus. He urged Congress to step up stimulus if lawmakers hope to bring relief to vast numbers of unemployed Americans.
Is it really unprecedented for a Fed chairman to publicly advise Congress on fiscal policy? How about Bernanke's immediate predecessor, Alan Greenspan, who appeared before the Senate Finance Committee in 2001 and gave his blessing for the Bush tax cuts?
The AP may have selective amnesia, but here is the headline and intro from the AP story covering then-Fed Chairman Greenspan’s speech:
Greenspan Endorses Tax Cuts -- WASHINGTON, Jan 25, 2001 (AP Online via COMTEX) Federal Reserve Chairman Alan Greenspan gave a major boost Thursday to President Bush's plan for across-the-board cuts in taxes ...
So to recap, two Fed Chairmen spoke publicly before Congress regarding fiscal policy. Greenspan endorsed the Bush tax cuts for the wealthy that plunged the country into record deficits. Bernanke urged Congress to provide fiscal stimulus to help combat devastatingly high unemployment. Yet, according to the AP, only Bernanke was out of line.
The AP warns "as he veers into these political debates, Bernanke may be putting at risk the Fed's strongest tools — its credibility and independence." With this type of reporting, the AP should worry about its own credibility, not Mr. Bernanke's.