Monetary Policy

"Bernanke Did Not Get a Single Thing Right."



Take heart. It's probably cold where you are, but in just a few weeks Ben Bernanke will see his shadow and we can all start working on our "long hot summer" thumbsuckers. In the meantime, get your blood boiling with the always dyspeptic Mish Shedlock, who has a nice roundup of Ben Bernanke detractors.

The gist: Time's carbon-based biped of the sidereal year (though not the tropical year) is a failure dipped in bad luck, a schlemeil, a man who exudes death. And yet you'd be a fool to bet against his (now supposedly controversial) Senate reconfirmation as chairman of the Federal Reserve Bank.

As surely as Earth rests at the center of a finite series of interlocking crystalline polyhedrons within the compass of a benevolent prime mover, so Ben Bernanke will clear all challenges and have his woeful career extended by the U.S. Senate.

So enjoy the high-profile Bernanke hate while you still can. This invective from The New York Times' David Leonhardt draws on real estate economist Robert Shiller and announces its sarcastic purpose in the first sentence: "If only we'd had more power, we could have kept the financial crisis from getting so bad." And in BusinessWeek, Stanford economist John Taylor, inventor of the "Taylor rule" for monetary policy, pummels Bernanke's preposterous claim that low interest rates did not inflate the housing bubble.

Mish has more, including some contempt for the Taylor Rule [pdf] itself, and some discussion of how the rule is constructed, which is too heady for me.

The real question: Is there any official whose failure is more clearly displayed in the United States in 2010? This is not President Obama, who can claim to have inherited a mess. This is a man who has been in his office since the beginning of 2006. What chart, what graph could you possibly still need to see to understand what a complete and utter buffoon Ben Bernanke is? The evidence echoes in every boarded-up storefront, every vacant mall, every soup line in every town in every state.