The WSJ reported today that economists overwhelmingly agree that Fed Chairman Ben Bernanke should be reappointed. This proves yet again the tendency of underperformers in various professions – particularly high profile ones – to enjoy undeserved longevity in their jobs. Sure, some could say Bernanke’s actions have (thus far) helped stave off a revisit of the Great Depression (to which I ask for how long and at what cost?). But the reality is that he was among those atop the economic totem pole who oversaw the mess we forged for ourselves in the first place. As the American Prospect rightly asks: Isn’t missing an $8 trillion housing bubble a mistake?
The [WSJ] article never once mentions Bernanke’s error in allowing the housing bubble to grow to a size where its collapse would inevitably produce a disastrous downturn. Bernanke completely ignored the bubble first as a Fed governor from 2002 to 2005, then as head of President Bush’s Council of Economic Advisors until he took over as Fed chair in January of 2006, and in his tenure as Fed chair until the collapse of the bubble brought on the downturn.
It would be difficult to imagine a more catastrophic mistake by an economic policymaker than missing such an enormous economic behavior. There are few people in any job who have ever committed such an enormous error. Yet, the WSJ never even mentions it. (Obviously another example of the soft bigotry of low expectations for economic policymakers.)
