Along with Gordon Brown, Simon Cowell, Victoria Beckham and all those wonderful, “love-to-hate” figures, the chairman of the US Federal Reserve is an easy and tempting target for all manner of slings and arrows.
Alan Greenspan knew that, and his successor, Ben Bernanke, found it out all-too-quickly.
But even after the sustained verbal batterings of the past year, the bearded former professor might be taken aback this week at the ferocity of the current debate over his recent testimony to a congressional committee on the Fed’s role in the Bank of America-Merrill Lynch takeover – not least, Mike “Mish” Shedlock’s character assassination posted on Mish’s Global Economic Trend Analysis on Monday.
Entitled “Bernanke is a total failure unsuited for role as Fed chairman”, Shedlock takes issue with Bloomberg columnist Caroline Baum’s recent assertion: “It would be hard to find someone more suited for the job of Fed chairman than Bernanke. His performance yesterday [June 25] has nothing to do with his unique qualifications for the position. … Unless President Barack Obama wants a solo pilot, he would do well to tap Bernanke for a second term.”
That really wound Mike up.
“Most often I agree with Caroline, but not this time, ” he says, as a prelude to demolishing 10 qualifications cited by Baum. Here’s a flavour of it:
1) Bernanke is either a liar or has a memory problem. I believe the former. Either way, there is a problem when a Fed chairman cannot recall a conversation with another Fed governor over something as critical as the Bank of America/Merrill Lynch merger. See Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America “Turd in the Punchbowl” for my take…
And so on, up to his concluding point: The Fed chairman is a “creative, political power grabbing hack who gives memorable speeches about throwing money out of helicopters”.
In fact, the full frontal assault of the pundits is at the point where any self-respecting blogger would feel remiss for not putting in their CDO’s worth.
As Calculated Risk noted in a Monday post: Given all the recent attacks, I’d be remiss if I didn’t write something about Bernanke, but first … I’ve been a regular critic of Ben Bernanke. I thought he missed the housing and credit bubble when he was a member of the Fed Board of Governors from 2002 to 2005. And I frequently ridiculed his comments when he was Chairman of the President Bush’s Council of Economic Advisers … But once Bernanke “started to understand the problem, he was very effective at providing liquidity for the markets, CR notes, before reminding us of a recent post by EconBrowser’s Jim Hamilton on grilling the Fed chair:
It is one thing to have different views from those of the Fed Chair on particular decisions that have been made– I certainly have plenty of areas of disagreement of my own. But it is another matter to question Bernanke’s intellect or personal integrity. As someone who’s known him for 25 years, I would place him above 99.9% of those recently in power in Washington on the integrity dimension, not to mention IQ. His actions over the past two years have been guided by one and only one motive, that being to minimize the harm caused to ordinary people by the financial turmoil. Whether you agree or disagree with all the steps he’s taken, let’s start with an understanding that that’s been his overriding goal.
Well, at least one person in Washington DC will be glad that CR, for one, “agrees with Professor Hamilton”.
Related links:
Testimony of Ben Bernanke on BofA-Merrill Lynch – FT