Better to engineer a mini-crisis while you’re still in control than let a crisis you can’t control run away from you.
by Charles H. Smith, Of Two Minds:
One of the most widespread misconceptions about the Federal Reserve is that its policies are based solely on economic data and models. This misconception is not accidental but the result of carefully managed public relations: The Fed fosters a public image of dispassionate experts working econometric magic that mere mortals (i.e. non-PhDs in Economics) cannot possibly understand.
(Insert joke about one-armed economists being unable to say “on the other hand” here.)
The reality is the Fed is as much a political and PR machine as it is a financial institution. Behind the carefully nurtured facade of experts poring over data and complex financial models is a leadership that spends an inordinate amount of time on PR and perception management (care to count the number of Fed-staged speaking engagements and press conferences this year?).
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