Why Does the Major News Media Treat The Federal Reserve Differently?
From the creators of the QE bears, presented last year, Omid Malekan is back with an essay on the Fed.
A recent article from Reuters on fears within the Economics profession of political encroachment on Fed action reads like a standard piece by the Media on the Central Bank. It starts with the assumption that the Fed is all knowing, and concludes that anyone trying to interfere with that process is wrong. This a remarkable anomaly from an industry that prides itself on its ability to speak truth to power. Traditionally in American politics, the more powerful a government official or body, the more critical and varied the media coverage, as can be seen by the turnout for a Presidential press conference vs one held by your local County Executive. But when it comes to the Fed, the relationship is turned upside down, and that’s remarkable for two reasons.
The first is the extent of the Fed’s power. If power is measured by the amount of influence exercised on the largest number of people, few organizations on earth rivalAmerica’s Federal Reserve. Their ability to directly set short term rates and indirectly manipulate long ones, along with their impact on currency, stock and commodity markets means almost everyone inAmerica, and countless others around the globe, are impacted by its actions. Contrast that power to an elected politician like the Mayor of New York, and you will quickly realize that the Fed’s reach goes beyond that of almost any other political figure inAmerica. And so you might think the Media would pay at least as much attention to – and be as critical towards – the Fed as it would Mayor Bloomberg, but that is not the case. The disparity is made even more surprising by the fact that the Fed has almost no democratic ties to the people, nor is it constrained by our system of checks and balances. You would think if one ofAmerica’s most powerful institutions was also one of its least democratic it would get a high level of scrutiny from the Media, but anyone that watches the Fed Chairman’s quarterly press conferences can see that this is not the case.
Full reading here.