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:
- He was deeply wedded to the philosophical conviction that central banks should be agnostic when it comes to asset bubbles.
- 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.
- 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. “