The press conference from a public official that actually matters today is not happening in the White House or on a tarmack in New Hampshire. In just a few minutes, Federal Reserve Chair Ben Bernanke will take questions from reporters. It’s the first time in history that a Fed Chair is holding a press conference, but it comes at a difficult time in the history of the Fed. Their public image has been soiled by a rough economy and their work to prop up zombie banks during the bailout era. Despite praise and a Man of the Year award from Time Magazine, public confidence in Bernanke and the entire institution of the Fed has dipped. For three years running they have failed to meet their targets on both core inflation (which is running below their preferred level) and unemployment (which is running too high). Their efforts to fix the economy outside of finance have been halfhearted at best. And even some otherwise staid observers are beginning to question Bernanke’s ability:

One question more than any than other is crying out for an answer: Why has Mr. Bernanke decided to accept widespread unemployment for years on end, even though he believes he has the power to reduce it?

The Fed’s own forecasts suggest that the unemployment rate won’t fall below 5 percent for perhaps another five or six years. Mr. Bernanke believes the Fed “retains considerable power” to reduce unemployment faster, despite the fact that its benchmark interest rate is zero, as he’s said before. Yet he has been hesitant to use that power.

He is in a tough spot, to be fair. Several other voting members of the Fed’s monetary policy committee — and some prominent members of Congress — oppose aggressive action, because they worry it will set off inflation. But these critics always worry about inflation. They have been wrong again and again over the last two years. More important, they don’t have enough power to keep Mr. Bernanke from pursuing the policy he thinks is best.

So the Fed’s decision to permit high unemployment for an extended period rests on his shoulders.

The success of economic policymakers to deal with the fallout of the financial crisis should not be measured by the ledger of whether TARP turned a profit, it should be measured by the millions of jobs lost over the same period, which no real effort to replace them. Fiscal policy isn’t even being considered as an option (and Bernanke has generally cheerleaded fiscal austerity), but monetary policy most certainly has failed in this regard. In addition to some minor constraints on the Board of Governors, Bernanke has put real constraints on himself, warning of risks to monetary policies that might actually work. The Fed has tremendous power it chooses to use for financial companies and not the rest of society.

The Fed’s release on the state of the economy, which will probably be part of Bernanke’s opening statement, shows them incapable of breaking out of this box, unable to perform necessary tasks to break the back of unemployment. I don’t expect Bernanke to elaborate much in his remarks; this is more about transparency theater than real transparency. But if there’s anything interesting from this press conference, I’ll note it here.

…You can watch a stream of the Bernanke press conference at this link.

…Bernanke’s statement was basically a recitation of the long-term outloook. The first questioner asked why GDP growth in Q1 is going to end up so horrible, with less than 2% growth. Bernanke said it was “transitory,” a phase that will pass. He also said “possibly there’s less momentum” in the economy.

….Bernanke getting lobbed softballs.

…Bernanke on the increase in gas prices: it’s all supply and demand. There’s a nod to the unrest in the Arab world. “This is a very adverse development… accounts for pretty much all the increase in our inflation target in the near term.” Says there’s not much the Fed can do. Not one word on speculation.

…Finally a question on jobs. Says that job creation has picked up in the last few months. The labor market is improving gradually. Encouraging to see improvement in recent months, but the pace is quite slow. Something like 7 million-plus jobs below where we were before the crisis. Obviously, labor market not in good shape.

…And actually a good question. “What would you do to lower the job rate and why aren’t you doing it?” Bernanke’s answer: “We saved the banks!” Also we have to worry about inflation (even though they’re not meeting inflation targets right now)

…NPR asks why QEII didn’t work. Bernanke disagrees and says it is working.