Should Bernanke stay or should he go?

His term ends in early 2010.  Obama’s decision on his fate will probably come much sooner. I tend to think he should be reappointed, not least because the apparent alternative is Larry Summers.  I’d like to see some other macro/policy economists get consideration — Brad DeLong, for example — but I’ve heard basically no other names mentioned besides Bernanke and Summers.

I think many if not most economists would give Bernanke about a D for his handling of the housing bubble and the expansion of 2005-2007 but at least a B for his handling of the financial crisis and macroeconomic fallout.   (It would be an A if not for the mixed signals in bailing out “little” Bear Stearns and not “big” Lehman Brothers.)  It seems like he’s learned that bubbles are not a benign phenomenon and that the Fed can act to stop them.

Last Sunday’s NYT had an excellent point-counterpoint on the question of Bernanke’s reappointment, a true heavyweight matchup between Nouriel (“Dr. Doom”) Roubini, arguing for, and Monetary History of the United States co-author (with Milton Friedman) Anna Jacobson Schwartz arguing against.  Both columns are well worth reading and re-reading over the next few months.

(This time you’ll have to find the Clash video yourself.  Sorry.)

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One Response to “Should Bernanke stay or should he go?”

  1. Fed up with Bernanke? « Blogging Through the Wreckage Says:

    […] tend to agree that Bernanke’s Fed has done about all that monetary policy can do here, but Scott Sumner, […]

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