Every news article that reports on Fed Chairman Benjamin Bernanke's assessment of the housing market should include a warning notice. Alan Greenspan has publicly stated that he deliberately chose to not to talk about the stock bubble while it was inflating, even though he recognized the bubble, because he thought it was inapproprate for the Fed to try to influence the course of the bubble. If Mr. Bernanke has the same view of the Fed's responsibilities as Alan Greenspan, this means that he would not say that he believed there to be a housing bubble, even if in fact did believe that there was a housing bubble. This means that, whether or not Mr. Bernanke's believes there is a housing bubble, he will say that he sees no serious risk of major price declines in housing prices. Reporters should inform readers of this possibility when reporting Mr. Bernanke's public statements on the housing market.
--Dean Baker
