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Bernanke Re-Appointed to Head Fed
Baseline Scenario's Simon Johnson asks "Which Bernanke Are We Getting?" "1. The Bernanke who led the charge to rescue the US (and world’s) financial system after the Lehman-AIG collapse. If you accept that the choice from late September was 'Collapse or Rescue,' this Bernanke did a great job. 2. The Bernanke who argued for keeping interest rates low as the housing bubble developed. This Bernanke was part of the Greenspan Illusion – the Fed should ignore bubbles and 'just clean up afterwards.' Is that still Bernanke’s view? Surely, he has learned from that experience. 3. Then there is Bernanke-the-reformer. Given #1 and #2 above, shouldn’t he be pushing hard for tough re-regulation of the financial system – particularly those dodgy parts where markets meet banking? But is there any sign of such an agenda, even with regard to recently trampled consumers – let alone 'too big to fail' financial institutions? Most likely, we’re in for another bubble."
Brad DeLong approves: "I think Bernanke is one of the best in the world for this job--I cannot think of anyone clearly better. He has made only one big mistake--buckling under to pressure from all those yelling at him for enabling moral hazard and not finding a way to takeover Lehman Brothers, and he is not going to make the same mistake again."
