Fed’s Newest President on Central Bank’s Failure to Communicate


This post is by WSJ.com: Real Time Economics from WSJ.com: Real Time Economics


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Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, has given an interview to his local paper, the Minneapolis Star Tribune, in which he comes out against breaking up big banks, says the government (including the Fed) did a lousy job of explaining its actions during the crisis and makes an argument for bailing out homeowners instead of banks.

Mr. Kocherlakota, an economic theorist with unconventional views, became Minneapolis Fed president in September and has done little public speaking since getting the job.

The best passage from the interview that runs with the story:

Q: Do you still think there was a failure to communicate the purpose of the bailout to the American people?

A: I think we’re still living with that failure. I don’t think I’m exaggerating when I say that in Congress, at least, this reflects popular opinion to a certain extent. There are some concerns about what the Federal Reserve did last year in September of 2008. I think that failure to some extent reflects our, now it’s going to be on my shoulders as well, to make the case that we were facing a disastrous situation.

The best detail in a questionnaire he filled out for the paper:

He likes a band called “The Killers.”


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