In this Krugman editorial he examines the pluses and minuses of retaining Ben Bernanke as the Fed Reserve Chairman. Mr. Bernanke has become an important symbol of the bailing out of big banks, but also the lack of progress on job creation.
Bernake was complacent as the danger clouds came in. But Krugman supports him because his replacements could be worse? Bernanke has not supported job growth alternatives and in fact just the opposite. He has done nothing to offer suggestions on how to bring down unemployment faster.
I’ll let Krugman defend himself here:
“But — and here comes my defense of a Bernanke reappointment — any good alternative for the position would face a bruising fight in the Senate. And choosing a bad alternative would have truly dire consequences for the economy.
“Furthermore, policy decisions at the Fed are made by committee vote. And while Mr. Bernanke seems insufficiently concerned about unemployment and too concerned about inflation, many of his colleagues are worse. Replacing him with someone less established, with less ability to sway the internal discussion, could end up strengthening the hands of the inflation hawks and doing even more damage to job creation.”
The Paulster continues:
“That’s not a ringing endorsement, but it’s the best I can do.
“If Mr. Bernanke is reappointed, he and his colleagues need to realize that what they consider a policy success is actually a policy failure. We have avoided a second Great Depression, but we are facing mass unemployment — unemployment that will blight the lives of millions of Americans — for years to come. And it’s the Fed’s responsibility to do all it can to end that blight.”
Am I being too critical when I say this analysis sounds like “the poor folk can have their recession, we’ll just have to get by with ours”?