There has been a lot of chatter about whether or not Ben Bernanke should have been reappointed to another 4 year term as head of the Federal Reserve. Alas, much of this chatter does not seem to be entirely fair to Ben.
A couple of things seem important and worth pointing out here.
First, it is not fair to lump all Republicans together into one group. There is a big difference between Maine Senator Olympia Snowe on the one hand, and Sarah Palin or Michelle Bachman of Minnesota on the other hand. Snowe is somewhat reasonable and can be reasoned with; and she might even be persuaded to support a public option in a health care reform bill. Palin and Bachman are (to use Barney Frank’s wonderful phrase) from another planet; they are still talking about death panels.
Ben Bernanke may be a Republican, but he is a very reasonable one. He is not the free market ideologue that Alan Greenspan was, but more the Olympia Snowe sort of Republican. It is probably also worth pointing out here that the co-author of his economics textbook (Robert Frank, who is very liberal as far as economists go) expressed great surprise after Ben was appointed to the Fed—not surprise that Ben was selected to head up the Fed; rather, Frank assumed that Ben was a Democrat.
Second, the historical record of appointments to the Federal Reserve has not been very good. John Kenneth Galbraith used to quip that Presidents tended to appoint political hacks to the post who could not even balance their own checkbooks. Alan Greenspan certainly was appointed for political reasons more than anything else, and did a pretty bad job. He is at the top of my list of people that history will hold responsible for our current economic mess. The last Democratic appointee to head the Fed, Paul Volcker, was a better than Greenspan-- but that is not saying much. Volcker pushed up interest rates far too much fearing an inflation that was overstated. The result was unemployment in excess of 10 percent.
Third, Ben certainly did not get everything right about the Great Recession; but again to be fair, virtually every economist missed this one. And while he was a little slower than average at first in being aggressive and making sure that the financial system did not totally collapse, he caught on fast enough and so we are not in the middle of another Great Depression. Alas, that is about as good as it gets and about as good as it will ever get.
Finally, we are not out of the woods yet (see some of my recent diaries) on this recession. So I am happier having a scholar of the Great Depression, who has learned some lessons over the past year, as the head of the Fed, rather than a rookie Democrat, who is likely to make some rookie mistakes and who does not have the same sense of history that Ben has.