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Two Cheers For Bernanke's Political Instincts

Like the Times' Edmund Andrews, I think Ben Bernanke has done an impressive job defending and demystifying the Fed's actions for average voters at a time that's pretty ripe for a populist anti-Fed backlash. (Among other things, Ron Paul's efforts to subject the Fed's conduct of monetary policy to periodic audits would be an absolute disaster were it to come to pass--you can quibble with the bank bailouts, but almost no one thinks Bernanke mishandled the setting of interest rates during the financial crisis. And, of course, it's almost impossible to keep inflation in check if politicians can monkey around with the process...)

Just one quibble with Bernanke's political instincts, though: Wouldn't he get the most bang for his buck, goodwill-wise, if he just folded on the proposed consumer financial products agency? (The idea is to take responsibility for consumer protection away from the Fed and house it in the new agency.) He seems to be spending a decent amount of capital protecting the Fed's turf here, when it's not at all clear the Fed is particularly interested in consumer protection, and it's certainly not central to its mission. Why not just give up the responsibility, as the administration and congressional Democrats prefer?

--Noam Scheiber