Yesterday, Fed Chairman Ben Bernanke spoke to a sell-out crowd of some 2,000 people at the Economic Club of Indiana. I was one of them, and found the talk to be another missed opportunity by a speaker who talks about what he thinks is important rather than what his audience does. Bernanke’s sins? He addressed inflation when most people want to hear about unemployment. And he broke almost every good speech-giving rule I know.
The headlines that followed underscored his focus: “Fed chairman Ben Bernanke tells Indianapolis audience inflation is under control,” the Indianapolis Star stated. “Bernanke makes strong defense of Fed rate policies,” the AP wire said. The conclusion of a Forbes.com reporter? “Ben Bernanke’s Indianapolis speech … is mostly on the dull side.”
The somber Bernanke began by telling the audience his topic would be “Five Questions about the Federal Reserve and its Monetary Policy.” Those questions were: a) What are the Fed’s objectives and how is it trying to meet them? b) What’s the relationship between the Fed’s monetary policy and the fiscal decisions of the Administration and Congress? c) What’s the risk that the Fed’s accommodative monetary policy will lead to inflation? d) How does the Fed’s monetary policy affect savers and investors? And e) How is the Fed held accountable in a democratic society?
Did this list come from talking to people who would be attending the event? I suspect not.
Bernanke read his workmanlike talk from a script, addressing each of the questions he had posed for himself, focusing mostly on inflation when many of us already know that story—it’s low; it’s staying low.
We wanted to hear, instead, about the steps the Fed is taking to ease unemployment and why it’s waited so long to do so. After all, the Fed’s dual mandate is both fiscal stability and full employment.
At the beginning of his remarks, Bernanke conceded, “The Fed cut short-term interest rates rapidly during the financial crisis, reducing them to nearly zero by the end of 2008 – a time when the economy was contracting sharply. At that point, however, we faced a real challenge: Once at zero, the short-term interest rate could not be cut further, so our traditional policy tool for dealing with economic weakness was no longer available. Yet, with unemployment soaring, the economy and job market clearly needed more support. We asked ourselves, ‘What do we do now?’”
Instead of giving an eager audience a simple and direct answer, Bernanke launches into a long story, which begins this way: “To answer this question, we could draw on the experience of Japan…”
He eventually tells the audience that once short-term interest rates were low, the Fed turned its attention to reducing long-term interest rates on mortgages, which have fallen from about 6 percent in 2008 to about 3.5 percent today. He continues with another section on how the Fed’s billion-dollar purchases of mortgage-backed securities are also helping the economy.
Writing yesterday on CNBC.com, William Dunkelberg, economics professor at Temple University, says, “The decision to undertake purchasing $40 billion of securities until employment improves enough to meet the Fed’s unspecified objective is certainly not ‘transparent’ but more importantly, the Fed has no plausible explanation as to how buying another trillion in assets would improve employment. (emphasis my own).
“When economic policy can’t be understood on a common sense basis, uncertainty rises and this inhibits the fundamental tendency of the private sector to recover and restore economic growth.”
I would add that when economic policy can’t be understood by the audience you’re addressing, your speech is not achieving its goals.
Paul Krugman, the New York Times‘ Nobel prize-winning economist, writes in his new book, End This Depression Now!: “Consider, if you will, the current state of our nation. Despite hints of economic progress, we’re still in the midst of an immense disaster, in which unemployment and underemployment are devastating millions of American lives. And none of this need be happening! There has been no plague of locusts; we have not lost our technological know-how. Americans should be richer, not poorer, than they were five years ago. Yet economic policy across the board has become almost passive, has essentially accepted this disaster instead of trying to end it.
“The Fed under Bernanke is by no means the worst sinner in this failure of intellect and will, and you can argue that Ben Bernanke has done a better job than anyone else who might have held his position. Yet the fact is, he has not done remotely enough. The Fed, under its eminent chairman, was supposed to be an important part of the solution to mass unemployment. That isn’t happening.”
Bernanke’s acknowledgement that most everyone has been touched and hurt by it? That they’ve been laid off; someone they know has lost a job or seen a business close; new graduates are having trouble finding work. That there has been long-term pain and despair. Not in these remarks.
Instead, Bernanke used some of his time to ride a self-serving hobby-horse – stressing that the Fed is totally independent of the political climate and that Congress should keep its nose out of the Fed’s decision-making processes.
I know some topics are more serious and significant than others – after all, a speech by the Chairman of the Fed has the power to move markets and it did following yesterday’s talk.
But all speeches benefit from human interest stories, self-deprecating humor, quotes, analogies, metaphors. I think of Fletcher Dean’s wonderful book, 10 Steps to Writing a Vital Speech, and how he painstakingly lays out the elements of a powerful and memorable talk. In his chapter, “Tell Me a Story,” he quotes Studs Terkel: “People are hungry for stories. It’s part of our very being.” Indeed.
In the wake of Bernanke’s disappointing remarks and similar failings by other speakers I’ve heard recently, I’m beginning to wonder if the notion of the creative, well-crafted and compelling speech is just a myth. Do speakers really use story? Do they try to paint a picture their listeners can relate to? Do they make an effort to connect with their audiences? To find out what they want and need to know? Do they use quotes, examples, humor?
Are we speechwriters so beaten down by communications staff, editors with red pens or by the speakers themselves that we’ve given up even trying?
Ben Bernanke is an intelligent and articulate man. He is in an important position of power in the United States. Big things happen based on his decisions and actions. He has an obligation to communicate clearly, often and well to the public he represents.
I believe he failed that obligation yesterday in Indiana. But more to the point, gentle reader, what do you think?
Cynthia Starks is a freelance speechwriter based in Central Indiana.