As Federal Reserve Chairman, Ben Bernanke rakes in a salary of $191, 300, a number which we can only hope includes performance bonuses. He heads up an agency that happens to be the largest bank in the world. It issues currency, is a bank for both the government and for giant commercial banks (acting as a lender of last resort), influences the nation’s – and arguably, the world’s – monetary policy more heavily and directly than any other institution in existence, and pretty much behaves as the axle around which the financial world turns. It’s a lot of responsibility to put on just a handful of individuals, and even more to put on the one person that’s the public face of the central bank. And the sad fact is, most of that happens behind the scenes, involving very advanced magic and incantations in Lovecraftian tongues, so the general public really lacks a grasp on what, exactly, the Fed does every day.
As a result, when news headlines read something along the lines of “Fed Does Nothing” it’s easy to say, hey, what are we paying these people for, and then imagine a meeting of the board of governors resembling a morning after scene in a frathouse, with everyone kind of shambling around in bathrobes after having woken up at one in the afternoon, unwilling to do anything more strenuous than watch Spongebob until someone looks at the clock and reminds everyone else that they’re supposed to decide on overnight lending rates in the next ten minutes and Ben pauses his bong hit long enough to say “Let’s leave it at like, zero, man,” and the other governors make some guttural noises vaguely resembling “Aye,” before passing out on the pee-stained mattress in the corner. Or at least that’s what I imagine.
Anyway, Fed Did Nothing, opting to leave interest rates at next-to-zero, which will help bolster either the economy or Paul Krugman’s blog. The markets rejoiced.