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Matthew C Klein

A Fed Bailout for Main Street

Ben Bernanke says that his policies haven’t helped the financial sector more than the median American. But he implied that the Fed could have done better with different tools.

Ever since the economy stopped shrinking, there has been a persistently wide gap between the fortunes of the wealthy few and everyone else. Today, Federal Reserve Chairman Ben Bernanke was twice asked by members of the House Financial Services Committee whether the central bank's policies have been responsible. Both times, Bernanke denied that the Fed was favoring Wall Street over Main Street.

In doing so, however, Bernanke implied that the Fed's ability to help regular people was limited by the tools at its disposal, because it is capable of directly affecting only interest rates and asset prices. The representatives weren't thrilled by that answer -- they need Main Street's votes.