I had the good fortune to be nearly front and center today at a speech given by Federal Reserve Chairman Ben Bernanke. It was his first major policy address since the economy got into this mess in October. vcfo had purchased a table and we attended with several clients and other friends of our firm.
His presentation to the Greater Austin Chamber of Commerce had been scheduled six months in advance, and the historic economic events of the past few months made this one of the highest attended business luncheons I have EVER seen in Austin (appox 1700 people!).
Mr. Bernanke is a smart guy. Much smarter than I am. I strained to listen to his every word and to understand the importance of what he and the rest of the government officials are doing to help stabilize the global economy. While he was clear that we still have some tough times ahead, I found that his message also had up-beat undertones. He was clear that this crisis is NOTHING like the Great Depression, and he sighted several reasons why this is not the same situation that faced the policy makers 80 years ago.
What I found most interesting was how the national media reported the comments made by the leader of The Fed to the Austin business community. Before I had time to drive back to my office there were stories up on Forbes.com, The New York Times website, SmartMoney.com, CNN Money.com and countless other financial sites about the Chairman's comments. They all had negative headlines (such as "Bernanke: Economic Weakness to Continue"), many of which implied that today's talk in Austin was somehow linked to the stock market's 670 point drop (his talk concluded about an hour before the markets closed in New York, although I am sure that the transcript of this talk was released to the press earlier in the day). Maybe those out of town who read the transcript got a different message than those of us who heard the spoken word live and in person. I understood his comments as very balanced about the future.
The address really had no new revelations about the state of economic affairs - but it was both realistic and cautious while still optimistic. The fact that the media would all use negative headlines on this evenly weighted (between positives and negatives) speech is a reminder that bad news sells more papers. The articles did go on to quote his more optimistic points, but much lower on the page.
I wonder, does the way the media report on such stories help to feed the continued downturn?
I will say that Mr. Bernanke struck me as both brilliant and funny. In his prepared remarks he was sort of dry, but during the Q&A he was both light hearted and self-deprecating. I feel better about the future of the economy knowing he is one of the people steering the ship. Hopefully he will prove me right!
Have A Great Day.