This week Federal Reserve chairman Ben Bernanke is giving the first two of four lectures to students at George Washington University on the history of economics and the role of the Fed. It’s part of the institution’s new strategy to bring transparency to its traditionally opaque operations shaping monetary policy.
For awhile, this opaque model seemed to work. But just like the financial institutions it regulates, the Fed has lost the trust of the American consumer. The most the average American knows about it is what they’ve seen portrayed in films like HBO’s “Too Big Too Fail.” And it’s taken a beating from primarily Republican politicians who are using the public lack of understanding of the Fed to score political points.
Bernanke recognized that it was time to pull back the curtain and tell a “deeper” story about the Fed’s role. Over the last few weeks, the Fed has begun to harness social media tools. It even launched a mobile app.
But it’s Bernanke’s decision to bring that message directly to college students that is most remarkable in its simplicity. It’s not just targeting a demographic that has among the greatest influence across social media…it’s an entry point – an open, but perfectly comfortable forum – to amplify that content through the larger network.
It will take more than a few lectures and an app to build back the trust and relevance the Fed has lost over the last few years. But these are the right first steps. The true test will be if the Fed can open a meaningful two-way dialogue. Transparency is always better and often critical…but it’s never enough by itself. The Fed needs to move from monologue to dialogue if it is to be truly understood and embraced by the public. I hope that Mr. Bernanke will seize this moment and make this just the beginning of a much larger conversation.