WASHINGTON — Every six weeks or so, around a giant mahogany table in an ornate room overlooking the National Mall, the 16 leaders of the Federal Reserve, one after another, give their take on how the U.S. economy is doing and what they want to do about it.
Then there's a coffee break. While most of the policymakers make small talk in the hallway, their chairman, Ben S. Bernanke, pops into his office and types out a few lines on his computer.
When the Federal Open Market Committee reconvenes, Bernanke speaks from the notes he printed moments earlier. "Here's what I think I heard," he'll say, before running through the range of views. He sometimes articulates the views of dissenters more persuasively than they did.
"Did I get it right?" he says.
The answer, in recent months, has been a resounding yes. And Bernanke's ability to understand and synthesize the views of his colleagues goes a long way toward explaining how he has revolutionized the Federal Reserve, which under his leadership has deployed trillions of dollars to try to contain the worst economic downturn in 80 years.
Famously soft-spoken, Bernanke is an unlikely revolutionary. He is, after all, a career economics professor, not a politician. He also happens to run an organization designed for inertia: Decision-making authority is shared with four other governors in Washington appointed by the president; the heads of the 12 regional Fed banks, who answer to their own boards of directors; and a staff of 2,000 that is led by economists who spent decades working their way through a rigid hierarchy.
Bearing criticism
Yet in the last 18 months, Bernanke has transformed the stodgy organization, invoking rarely used emergency powers. His decision to do so has drawn criticism -- he has transcended traditional limits on the role of a central bank, stretched the Fed's legal authority and to some, usurped the responsibility of political authorities in committing vast sums of taxpayer dollars.
The Fed's actions put the economy on a "perilous" course, said James Grant, editor of Grant's Interest Rate Observer.
"The real risk is that he will wind up instigating rampant inflation" once the recession has passed, he said. "A related possibility is that the Fed has created incentives to overdo it in borrowing and lending . . . which is what got us into this mess in the first place."
