Federal Reserve Chairman Ben Bernanke prepares to watch a MLB baseball game between the San Francisco Giants and Washington Nationals in Washington, D.C.
Ben Bernanke is rarely accused of using steroids, and he has never led the Federal Reserve to a World Series championship.
However, the man who is one of the biggest celebrities in Washington bears a few things in common with one of the biggest celebrities in New York City, Yankees third baseman Alex Rodriguez, not least of which is press attention. After the Federal Open Market Committee meeting adjourns today, financial reporters will cover Bernanke's every word with the same eagerness with which sports reporters chase A-Rod down for interviews.
For those who care more about RBIs than MBSs, the complexities of monetary policy can perhaps be best understood by looking at the other similarities between the Fed chairman and A-Rod.
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They both have reputations for not coming through in the clutch.
Yankees fans watch Rodriguez with bated breath, rooting for him to hit another home run and boost the team to a win. But recently, his performance has dropped off, leading some to wonder if he can still play the way he used to. And rightly or wrongly, he has often been accused of not coming through when it counts.
In the same fashion, markets have for months scrutinized Bernanke's comments for any hint that he and the FOMC might once again stimulate a flagging economy with more quantitative easing. Bernanke has left the door open, remarking in April that the Fed is "prepared to take additional balance sheet actions if necessary," but the Fed has thus far held off. And while not everyone is a fan of more easing, the stock market would likely jump on news of QE3.
That's not to say that Bernanke and A-Rod have never delivered for their fans: Alex Rodriguez has had an excellent career and has won a World Series ring, and, most recently, tied the legendary Lou Gehrig for career grand slams.
Meanwhile, Bernanke and the Fed have already on several occasions used stimulative measures to boost the economy in the wake of the financial crisis.
There is one crucial distinction between the banker and the ballplayer: Bernanke and the FOMC are being strategic in holding back, which is likely not the case with A-Rod. The Fed has little policy ammunition left, meaning that the FOMC might be saving the QE3 bullet (should it choose to use it) for when it will be most effective.
They both work at places that print money.
...so to speak. Quantitative easing, in which the Fed purchases massive amounts of financial assets, is often described as "printing money."
The Yankees have their own massive amounts of cash, with a payroll of nearly $198 millionâ€"more than $23 million higher than that of the No. 2 team spending-wise, the Philadelphia Phillies. The team is often criticized for its big spending, and rivals have accused the Yankees of having "bought" championships.
All joking aside, there is another commonality here, and that is the unprecedented nature of the Yankees and the Fed's spending.
The Yankees bought Rodriguez with a record-breaking $275 million contract, and he is paid substantially more than any other player.
Meanwhile, the Fed has entered a brave new policy world with its own spending.
"We are in unconventional territory with monetary policy," says Adolfo Laurenti, deputy chief economist with Mesirow Financial. "If I go to a textbook and search for quantitative easing, I don't find it."
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They're both besting the team across town.
The New York Mets are having a good seasonâ€"they're second in the National League's eastern division and they have a winning record this season. But the Yankees are doing better, sitting at the top of the American League East, and with a much better recordâ€"not to mention the fact that the Yankees swept the Mets in a three-game series earlier this month.
Bernanke and the Fed have in their own way been outperforming the team across townâ€"in this case, Congress.
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