Another Term for Bernanke as Head of the Federal Reserve?

The NY Time's Economix blog has a discussion of whether Bernanke show be reappointed as Chairman of the Federal Reserve. My opinion is "no". The guy hasn't done enough to save the economy. Worse, he got everything wrong throughout this crisis (and is still getting it wrong by not accepting the need for more stimulus to lower unemployement, see this).

Here's the list of charges from the indictment:

• July 1, 2005 (responding to a CNBC question about whether there was a housing bubble and whether it could cause a recession): “It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”


• May 17, 2007: “We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”


• July 18, 2007 (a month before the subprime mortgage market began having problems and five months before the recession began): “Employment should continue to expand. … The global economy continues to be strong. … Financial markets have remained supportive of economic growth.”


• Feb. 28, 2008: “Among the largest banks, the capital ratios remain good, and I don’t expect any serious problems … among the large, internationally active banks that make up a very substantial part of our banking system.”


• June 9, 2008 (six months into the recession and three months before the financial panic began): “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”


• May 5, 2009: “Currently, we don’t think [the unemployment rate] will get to 10 percent.” (Five months later, the rate reached 10.2 percent.)

It is interesting that a lot of famous and insightful people jump to his defense. But I put that down to the "clubbiness" of the elite, they look after their own. The "help" get fired, but managers get a "lateral promotion", or as in the case of Bernanke, they are forgiven and given yet another chance to get it right. We all suffer under this anti-meritocracy that the elite keep in place to protect their privilege.