I'm not an American and it's up to Americans to decide who they want running things. But here is an opinion from a neighbour up north :)
I think Ben Bernanke should be re-appointed as chairperson of the Federal Reserve. I think it's ridiculuous that some are pushing for Lawrence Summers, who is probably the #2 candidate right now. Lawrence Summers is favoured by some Democrats, who view Bernanke as being cut from the Republican cloth and incompatible with their policies.
There is a reason I gave the 3rd place Super Duper Management Turtle award to Ben Bernanke earlier this year. I would be the first one to admit that Ben Bernanke made a significant error with the housing bubble. No way to argue against that. But I think many ignore a major call he made last year in the early stages of the crisis. Let me quote what I said earlier in the year:
Bernanke made a major contrarian call that everyone is ignoring. He, similar to my view early in the year, felt that inflation was a lagging indicator and wasn't something to worry about. Recall that commodity prices were skyrocketing at this time. He turned out to be right. In lesser hands, the central bank may had done something disastrous at that time, such as significantly boosting interest rates or sharply contracting the money supply.
Although some (the loose money crowd) have been critical of him for not expanding the money supply, I think he was ingenious in buying assets while selling Treasuries. Selling Treasuries is unusual but this move prevents inflation (since you aren't really increasing the money supply.) Increasing the money supply is easier now but it was quite risky a few months ago when commodities were still strong and speculators were ready to crush the US$, so that's a bold move by Bernanke.
So, yes, he made a serious error with housing—so did 90% of the population, including "the market" itself. But I think he made it up with his actions in the last two years.
I have to admit that I'm somewhat biased here. I lean towards deflation and therefore feel that someone like Ben Bernanke is far more skilled in that scenario. Someone like Lawrence Summers or Janet Yellen or Martin Feldstein aren't as skilled in handling deflationary scenarios. However, many are in the high inflation camp right now and if we get such a scenario, Bernanke may not be very good.
My opinion doesn't count for much but here's one to re-appointing Ben Bernanke... Tags: opinion