Ben S. Bernanke's leadership of the Federal Reserve

Ben S. Bernanke is a noted American Economist with degrees in Economics from Harvard and MIT, past professorships at Stanford, NYU, MIT and Princeton, experience as a member of the Federal Reserve System's Board of Governors, and experience as past Chairman of the Presidential Council of Economic Advisors; furthermore, Bernanke is a "Depression Scholar" (Grunwald, 2009) whose "main academic focus was the central role of monetary policy and the Fed in creating the catastrophe" (Grunwald, 2009). Appointed Chairman of the Federal Reserve Board on February 1, 2006 during the Bush Administration, Bernanke was reappointed to a second term during the Obama Administration by 70-30 Senate vote on January 28, 2010 (Board of Governors of the Federal Reserve System, 2012). Bernanke's reappointment was reportedly "contentious" and he was reappointed by the smallest margin ever for Federal Chair confirmation (Binder, 2010). Given our slow economic recovery, questions have arisen about Bernanke's acts, omissions and possible lack of aggressiveness needed to stimulate economic recovery and lower unemployment rates.

Analysis

Ben Bernanke Does Not Pose a Threat to the U.S. Economy

Bernanke is good for the U.S. economy. First, he has the education, experience and special focus on the Depression to intimately understand and maneuver the Federal Reserve, which so significantly affects our economy. Secondly, he takes bold moves when necessary and helped avert a full-blown Depression. When Time celebrated Bernanke as "the most powerful nerd on the planet" (Grunwald, 2009) and named him Person of the Year for 2009, it did so because Bernanke "didn't just reshape U.S. monetary policy; he led an effort to save the world economy" (Grunwald, 2009) and "His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression" (Grunwald, 2009). Finally, he also withstands criticism and apparently does not act for purely political or "popular" reasons. Bernanke has been severely criticized by Nobel Prize-winning economist and columnist for the New York Times, Paul Krugman, for failing to act aggressively enough to stimulate the country's economic growth while lowering our unemployment figures. Acknowledging the limited options available to Bernanke, Krugman believes Bernanke should raise our inflation target rate from 2% (Gustin, 2012). Krugman points to Bernanke's own professorial suggestion that Japan use exactly the same tactic in 2000. However, Bernanke counters with the fact that we are not dealing with deflation (falling prices) as Japan was in 2000 (Gustin, 2012). In addition, Gustin astutely compares the rights/duties of professors and columnists to "be provocative and stir debate" (Gustin, 2012) vs. The sobering responsibilities of the Federal Reserve Board Chairman "when bold ideas run smack into the responsibility -- and political considerations -- of actually governing, and maintaining public support to continue doing so" (Gustin, 2012).

Conclusion

Ben S. Bernanke has proven himself to be a very good choice for Chairman of the Federal Reserve Board in both his first and second terms. Rather than being a threat to the economy, Bernanke has been good for the economy because: he has the education, experience and special focus as a Depression Scholar; he makes necessarily bold moves and did avert a Depression; he understands the sobering responsibility of his position and does not act/react due to political moves or criticism. For those reasons, plus the fact that Bernanke was the right compromise for the time, the Senate's reappointment decision was correct and Bernanke should not be removed from his position.