Paul Solman: The Federal Reserve is one of the least understood government entities in the United States. When I spoke to Alice Rivlin, former vice chair of the Fed Board and now a senior fellow at Brookings, about what people least understand about what goes on at the central bank, she had this to say:
Alice Rivlin: I think average people haven’t a clue what happens at the Federal Reserve. When I was appointed to the Vice-Chairmanship of the Federal Reserve, many of my good friends in Washington, of all places, said, ‘That’s very nice, congratulations, what does it do?’ Some of them even said, ‘Oh, that’s terrible. Are you moving to New York?’ They didn’t know that the Federal Reserve was on Constitution Avenue — the Board of the Federal Reserve. Of course, there’s a bank in New York as well. But the ignorance of even my sophisticated friends about the workings of the Fed astonished me.
Check out more of the conversation in the clip below.