Thursday, October 6, 2011
The Fed on Facebook?
Here's one for the conspiracy people. The fed now wants to track when it is being talked about across the major social media platforms. They claim that this is in an effort to monitor the perception of how the fed is performing. I would see that as a valid point, however, is monitoring conversations on Facebook really the best way to do this? A quote from the text summarizes this article well. "In other words, the Federal Reserve wants to develop a highly sophisticated system that will gather everything that you and I say about the Federal Reserve on the Internet and that will analyze what our feelings about the Fed are." I think the fed has better things to worry about. You can make the argument that expectations matter, but why go to a weak secondary source to get this information? That is, people (Facebook) who really aren't educated on what they are talking about ( for the most part). They look to implement this system in December of 2012.
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An interesting article! I fail to comprehend why the fed would want to spend time and money to gather information about people who are mostly illiterate when it comes to real economics! One reason could be that it wants to see how people respond to policy changes that it undertakes as it affects consumption and investment in the economy. But is traditional media not enough to monitor that? I would however, still like to believe that people sitting in the Fed are knowledgible and know what they are doing. It would be interesting to see the implications of this initiative.
ReplyDeleteI find it very interesting that the FED would go through so much trouble to find out what people think of its policies. One of the good things about the FED is that it is not composed of elected officials. This means that the FED can focus on making decisions to improve the economy without its members being biased by their desire to get re-elected. While it makes sense that the FED monitors people's general sentiment towards it, I agree with Harsha that traditional media is sufficient to do this. If their is a large outcry about the FED, it would appear in the news. Going to social networking sites is not necessary to gauge people's reactions towards the FED's policies.
ReplyDeleteI think this policy, if properly implemented to protect people's privacy, makes a lot of sense. For any given action of the Fed there are two effects. The first is the intended effect (say buying up bonds), the second is how it changes people's expectations. Both are of equal importance, if the fed's policy has a good intended effect but people's understanding of it is negative then the Fed needs to know that. While the fed probably is pretty good at measuring the first effect it may lag in measuring the second.
ReplyDeleteI think this is a little creepy. I agree with the first commentator that it doesn't make sense for the Fed to monitor the opinions of people who don't really know what they're talking about. I just don't see why it is necessary for an institution that is not reliant on public opinion to go to these lengths to monitor it.
ReplyDeleteIt's kind of wield to see this topic in US. I thought only in some other countries peple need to pay attention to what they say on internet.
ReplyDeleteAs the article says, the Fed may be just want to monitor the comments about the Fed and related talking, through these getting to know what people are thinking right now, and then maybe take some opinions into consideration.
It's a good thing actually, getting to know what normal people's thought DIRECTLY. But I also think the privacy safety issue will be very intense too.
And we wonder where all are money goes. God knows we all comment about the FED on facebook everyday.
ReplyDeleteIm excited to see how will this out. I agree with most people above me that its not like a lot of us will comment or write about economical issues and some people will just comment on the things they don't really know what they are talking about. Most importantly the Fed should know better than most of us. Its their job. They should be spending money on more important things.
ReplyDeleteFactoring in public opinion will improve the Fed's policies in the future. Besides privacy on the internet has been gone for a while and for the most part people really don't care.
ReplyDeleteHa, how many of us in this class has ever in their life mentioned anything about the FED on FB.
ReplyDeleteThis is a little much from the FED to take peaks into conversations on Facebook. At what point does it stop? First Facebook then our emails perhaps?
ReplyDelete