Bernanke, The Villain

According to Roger Lowenstein’s article in the Atlantic none of the invective heaped, of late, on Ben Bernanke would have come as a surprise to anyone not living under a stone…... "Bernanke himself certainly would not win a popularity contest. In 2010, four years after his appointment by President George W. Bush as Fed chief, he was approved for a second term by a Senate vote of 70 to 30—the slimmest margin for a Fed chief ever. (In 2000, Alan Greenspan won a fourth term by a vote of 89 to 4.) Bernanke’s troubles with politicians were a direct result of his sagging poll numbers, and since his reappointment these numbers have only gotten worse. In a Bloomberg poll last September, only 29 percent of respondents expressed a favorable opinion of Bernanke; 35 percent had an unfavorable view. In October, just 40 percent of those surveyed by Gallup said they had confidence in Bernanke’s ideas for creating jobs; even congressional leaders inspired greater faith.

"Over the past four and a half years, Bernanke, 58, has presided over the most sustained period of crisis of any civilian official in recent history, with the fate of millions of unemployed and underemployed Americans hanging in the balance. Only recently has the economy begun to show signs that the recovery is gaining steam. Since August 2007, Bernanke has deployed the Fed as the lender of last resort to the banking system and worked overtime to furnish an “elastic currency”—that is, to keep enough money in circulation for the economy to function. These were the very tasks that the founders of the Fed envisioned. Bernanke has performed them by tripling the size of the Fed’s balance sheet—to an eye-popping $2.9 trillion—and by inventing a welter of new programs to lend to banks and other private-sector institutions. For most of the Fed’s history, popular opinion—being generally opposed to depressions—has favored such efforts, but today the public’s disgust with government, and with banks, has cast a shadow of suspicion upon Bernanke….."

"Bernanke’s unconventional programs have been implemented in two phases. During the financial crisis of 2007–09, he bailed out a handful of large banks and devised a series of innovative lending operations to disperse credit to banks, small businesses, and consumers (virtually all of these loans have been repaid at a profit to taxpayers). He also lowered short-term interest rates to nearly zero and made private banks run a gantlet of stress tests to ensure some minimal level of solvency going forward. Although fierce anger against the bailouts persists, there is little argument that this first stage was a success. However untidily the rescue was managed, the financial crisis is over…."

Wait...wait...there's more at http://www.theatlantic.com/magazine/print/2012/04/the-villain/8901/