The Case for Bernanke: A Really Bad Joke

Dean Baker:

The conventional wisdom (CW) is that Ben Bernanke deserves a second term as Fed chairman because of the extraordinary measures he took to prevent the economy from collapsing into another Great Depression. Bernanke is one of the country's leading experts on the causes of the Great Depression and therefore was especially well prepared for dealing with the downturn. The promulgators of the CW argue that we were fortunate to have the right person in the job when we faced this crisis. Of course we would not want to get rid of Mr. Bernanke at a time when the economy is still so vulnerable.

The problem with the CW is that it doesn't fit the facts in the world. Yes, Bernanke took unusual steps that helped to stabilize the financial system and prevent a complete collapse. But before we become too euphoric in celebrating our good fortune, it is worth remembering that England, Japan, Germany, China and everyone else (with the possible exceptions of Latvia and Iceland) seems to have also escaped a second Great Depression.

 

These other countries managed to avoid complete collapse even without the benefit of Mr. Bernanke's expertise, so clearly it was not essential. This obvious fact, which somehow escaped the promulgators of the CW on Bernanke, should be sufficient to put to rest the argument that we somehow cannot survive without Bernanke.

Posted via email from Jim Nichols