"This further extension of the quarterly projections should provide the public a clearer picture of FOMC participants’ policy strategy," Bernanke said. "Also, increased clarity about the FOMC’s views regarding longer-term inflation should help to better stabilize the public’s inflation expectations, thus contributing to keeping actual inflation from rising too high or falling too low." [1]
So Ben Bernanke made a speech yesterday where, among other things he introduced "outlooks [that] will offer six-year forecasts on unemployment, inflation and economic output." It’s too bad that Alan Greenspan didn’t have the Fed doing this long since. Just think, those smart people could have alerted us to the present crisis as early as 2002! Oh well, maybe not 
Given their recent forecasting experience, this sounds a lot more like making up bedtime stories to put Joe 6pack back to sleep. "… [S]tabilize the public’s inflation expectations" indeed! You don’t have to be a fan of Chomsky to parse this as a propaganda exercise.
And just to add to the fun, at the most sensitive time for American financial policy in 70 years, we get this assertion about new standards of statistical transparency:
… Board Vice Chairman Donald Kohn is leading a committee that will review our current publications and disclosure policies relating to the Fed’s balance sheet and lending policies. The presumption of the committee will be that the public has a right to know, and that the nondisclosure of information must be affirmatively justified by clearly articulated criteria for confidentiality, based on factors such as reasonable claims to privacy, the confidentiality of supervisory information, and the need to ensure the effectiveness of policy.
… so there we have it. Clear policy direction that any number that might embarrass a FOMC initiative can be suppressed. H.4.1, I fear thou knowest too much. I will be delighted (but a bit surprised) if this new initiative to "open up" the Fed’s weekly reports doesn’t end up censoring some of their best and most revealing dataseets, including the foreign central bank holdings of treasuries and agencies that the NY Fed has been showing us faithfully every week since early February 2000. Opening up those Thursday afternoon updates looks like it’s going to be especially exciting over the next few weeks.
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[1]: "Fed: Long view better, short term stinks — Fed chief Bernanke unveils long-term forecasts, saying public has ‘right to know.’ Central bank’s ’09 outlook is grim.", by David Goldman, CNN Money, February 18, 2009.
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John-
Here’s what some of those great minds at the Federal Reserve were saying back in 2005:
I think their crystal ball needs greater transparency- it doesn’t seem to be any good even for four years, let alone six!
twist -
That’s an interesting piece of the puzzle. I have never understood how Fed Governor Susan Bies (to cite but one example) could have been running around two years ago shouting from the rooftops that subprime was contained amidst so much evidence to the contrary, even if you needed to dig a bit out of the mainstream to see it. Boy, but Lingling was smokin’ over at Dow Jones in those days.
The high-priced help with the Ivy League Ph.D.’s were sure drinking there own Kool Aid back then
John-
I didn’t look at the contributors for every senator and congressman, but I looked at a lot, and the banks were always among the top contributors. I think the theory that the Federal Reserve is somehow free of political pressure is so much bunk.
There were a lot of profits being made in subprime foolishness, and the Fed needed an excuse for not “pricking the bubble” and “taking away the punch bowl”. The economy was booming, Greenspan was looking like a hero, and the Fed didn’t have the moral fortitude to do what they needed to do.
John M,
Did you hear the one about President Bush running for office again in 2012?
http://www.associatedcontent.com/article/1456747/former_president_bush_will_run_for.html?singlepage=true&cat=2
Twist,
What profits? You mean double entry computurized book keeping blips and blaps the Fed still calls M3?
http://www.associatedcontent.com/article/587683/the_real_estate_bust_turns_into_a_global.html?singlepage=true&cat=54
AlexSGabor-
There were a number of CEOs, fraudsters and others who managed to milk the system enough that their personal profits managed to keep them comfortably ahead of M3 issues.
That said, you point is well taken.