Fed's openness a positive step

In the first such news conference ever for the head of the nation's central bank, Ben S. Bernanke revealed himself yesterday to be patient, thoughtful, charisma-free -- and lacking the powers of Superman.

Unfortunately, that's the problem. America is climbing painfully out of a financial hole of historic proportions. Unemployment, at 8.8 percent, remains stubbornly high. Millions of homeowners are facing foreclosure or owe more on their mortgages than their homes are worth. And lately soaring oil and gasoline and food prices are hammering household budgets.

Anxious Americans hoping for some magic cure-all from the Federal Reserve Board will come away disappointed -- which is unfortunate because the Federal Reserve is probably doing as well as can be expected under some very difficult circumstances. It played a big role in creating those circumstances, of course, by its lax regulation of the financial system and extended easy money policy in the run-up to the financial crisis.

But in coping with the crisis and its aftermath, Bernanke has mostly excelled. Things are getting better, just not as fast as anyone would like. His critics -- and they are legion -- extend across the political spectrum and can't agree on what he ought to do instead of what he's doing, which in itself testifies strongly in his favor.

Remember that the Fed's job is to maximize employment while maintaining stable prices, mandates that are often at odds. Bernanke acknowledged that unemployment -- particularly long-term unemployment -- is a terrible thing. But it's unclear whether the Fed can lower it faster, or whether the attempt would fuel inflation, which creates problems of its own.

Pressure on the Fed to do something -- although hardly anyone can agree on what -- is even greater than usual because the federal and state governments are focused on spending reduction, which means that taken together they won't be the source of much economic stimulus. So it's all up to the Fed.

Hardly anything in life is free, and that includes Fed policies to juice the economy. Cheap money boosts exports but makes imports -- including oil -- more expensive. It benefits debtors, including Uncle Sam, at the expense of savers, including many retirees, who can't get much interest on their nest eggs. And it gets people worried about inflation, which can become a self-fulfilling prophesy.

In his news conference, Bernanke came across as sympathetic to the pain of families coping with joblessness and higher gas prices. But he argued that the Fed has been creative, aggressive -- and successful -- in the wake of the crisis, a reference to such extraordinary measures as its bailout of the financial system (which worked) and its decision to buy Treasury debt by printing money (fingers crossed). We were also glad to hear him call on Congress and the president to get control of the nation's unsustainable long-term deficit.

He's even opened up the Fed a bit to public scrutiny -- by having a news conference, for example. Rolling back some of his institution's traditional secrecy should help it achieve its goals -- by signaling where the Fed is going, markets can more easily help get us there. More openness should also bolster public confidence. Given the Fed's prior failings, his timing couldn't be better.