Ben Bernanke named person of the year
Time magazine praises the Fed chairman for fast, bold moves to rein in the unfolding economic crisis.
He didn't win the award for foreseeing the economic crisis -- in fact, the magazine says, he was totally clueless on that front. He didn't win for his charisma or leadership skills. Time calls him a nerd.
What the magazine likes is how quickly Bernanke went into action when he finally figured out that things were going downhill. He made some bold, dramatic decisions that drew intense criticism, but in the end he prevented the recession from becoming much worse.
Here's why Time loves Bailout Ben:
- He injected trillions in new money into the economy.
- He cut interest rates to nearly zero.
- He lent money to mutual funds, hedge funds, insurers and others who don't normally get Fed consideration.
- He "blew up the Fed's balance sheet to three times its previous size."
- He helped free up money to finance car loans, student loans and mortgages.
- He helped engineer the banking industry bailout.
Bernanke has plenty of critics, and his every move is closely watched and debated by economists who disagree with his Keynesian tactics. He's been raked over the coals by politicians who think they know better.
But Bernanke is positive these moves helped avert an utter disaster.
Bernanke also knows the economy would be much, much worse if the Fed had not taken such extreme measures to stop the panic. There's a vast difference between 10% and 25% unemployment, between anemic and negative growth. He wishes Americans understood that he helped save the irresponsible giants of Wall Street only to protect ordinary folks on Main Street.So is Time correct in its choice? There were some pretty slim pickings out there for 2009. It's hard for me to come up with any name that we could rally around for the inane title of "Person of the Year."
It's too early to know if Bernanke's aggressive actions were the correct ones -- the economy is still right on the edge of a cliff.
So why not give it to Bernanke, flaws and all. I reserve my adulation for another year or so, until we see the consequences of his decisions.
Here's what others are saying about Time magazine's choice:
Zero Hedge: "Dear Chairman, Congratulations on Time's Top Tick of your career. With a 79% disapproval rating, you are now one of the lest deserving Men of the Year."
MarketWatch: "This may be the first year in a while when Time doesn't get its fair share of abuse for its selection. Time made the right call this time."
Matthew Yglesias: "It demonstrates a very specific class skew -- extraordinary intervention into the market place just long enough to fix the situation from the point of view of asset-owners while leaving wage-earners holding the bag. But the owners and managers and editors of Time Magazine and the companies that advertise in it probably don’t care so much about that."
The WSJ Deal Journal: "The first draft of history has generally been kind to Bernanke, who is expected to coast to a second term. But history has not always been kind to previous winners of the Time award. With unemployment at 10% and business lending dormant, Bernanke knows that the final chapters of the financial crisis are still being written."
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