The share of Americans who think the Federal Reserve is doing an excellent to good job has sunk even as chairman Ben Bernanke has taken unprecedented steps to try to prevent a financial catastrophe, according to a new poll released Monday.
Many analysts credit Bernanke’s unconventional approach with averting disaster last year. But his support of taxpayer bailouts of big financial firms such as insurance giant American International Group upset the public and many lawmakers.
The Gallup poll, conducted in mid-July, found that only 30 percent rated the Fed as doing an “excellent/good” job.
It was the lowest such score out of nine government agencies. And it was down sharply from the 53 percent who thought the Fed was doing an excellent to good job in a survey in 2003. At that time, then-Fed chief Alan Greenspan was steering a fragile economy back from the 2001 recession, terror attacks and corporate accounting scandals that had rocked Wall Street.
The Centers for Disease Control and Prevention topped the list with 61 percent of poll respondents rating that agency excellent to good. NASA and the FBI tied for second place at 58 percent each.
The CIA, the Department of Homeland Security, the Environmental Protection Agency, the Internal Revenue Service and the Food and Drug Administration all earned scores higher than the Fed’s, the poll said.
The results come at a delicate time for Bernanke. His term expires early next year, and President Barack Obama will have to decide whether to reappoint him to a new four-year term or find a replacement. Bernanke has been under fire on Capitol Hill for rescuing AIG to the tune of more than $180 billion.
And he faces skeptical lawmakers wary of expanding the Fed’s powers — as envisioned by the Obama administration — given the failure of the Fed and other regulators to detect problems that led to the financial crisis. The administration wants the Fed to police big financial companies whose failure could endanger the entire economy.
Despite efforts to become more open, the Fed has built a reputation as one of Washington’s most esoteric institutions. “To many, the Federal Reserve is just a mysterious entity,” said Richard Yamarone, economist at Argus Research.
At a town-hall style meeting with Bernanke on Sunday night, one of the participants, social worker Gwen Bailey, confessed: “I don’t have a clue what (Fed policymakers) do, how they impact our lives.”
The Fed’s primary mission is to put the economy and the job market back on a healthy path and keep inflation low and stable. It also oversees the safety and soundness of banks.
Bernanke has embarked on an unusually public campaign to reach out to ordinary Americans to explain the Fed’s actions to fight the longest recession since World War II. His most recent effort involved fielding questions from America’s heartland Sunday night.
“When the elephant falls down, all the grass gets crushed as well,” Bernanke told the town-hall meeting in Kansas City, Mo., defending the Fed’s action to rescue AIG and other companies deemed “too big to fail.” The meeting will air this week in three installments on the “The NewsHour with Jim Lehrer.”
To revive the economy, the Fed has slashed a key lending rate to a record low near zero. It’s also buying $1.75 trillion in government bonds, as well as mortgage securities and debt, to try to drive down rates on mortgages and other consumer debt to spur spending.
“Those were some very long nights I spent on the sofa in my office as we worked to try to keep the financial system running,” Bernanke told the town-hall meeting.
The Gallup poll, conducted July 10-12, was based on telephone interviews of 1,018 adults. It has a margin of error of plus or minus 3 percentage points.