The Case Against Ben Bernanke

It is easy to score rhetorical points pillorying newly re-appointed Fed Chair Ben Bernanke, but Stephen Roach makes the most reasoned “con” case in the FT today. He argues three points about the pre-Lehman incarnation of Bernanke:

  1. He was deeply wedded to the philosophical conviction that central banks should be agnostic when it comes to asset bubbles.
  2. He was the intellectual champion of the “global saving glut” defence that exonerated the US from its bubble-prone tendencies and pinned the blame on surplus savers in Asia.
  3. He is cut from the same market libertarian cloth that got the Fed into this mess.

Finally, and this is a broader point, Roach argues that it is too soon to grant Bernanke as having saved the day: “It would be the height of folly to reward Mr Bernanke for the recovery that never stuck. “

More here.