I rarely agree with very much Steve Rattner has to say, but in this case, I think he’s right on:
When he takes his leave this week, having presided over his final meeting of the Fed’s policy-making committee, [Ben Bernanke] will depart as one of the finest chairmen in the institution’s hundred year history, having played a central role in averting a financial meltdown and lifting the nation out of recession. .. .
And his collegial style allowed him to work effectively with two other extraordinarily capable architects of the rescue: Henry M. Paulson Jr., Mr. Bush’s final Treasury secretary, and Timothy F. Geithner, president of the Federal Reserve Bank of New York and later President Obama’s first Treasury secretary. These men first threw out the playbook from past crises as inadequate to the current challenge and then threw out the rule book, as they formulated innovation after innovation to fight the conflagration. [Emph. added.] You bet! Ben Bernanke’s great strength, in addition to his intelligence and temperament,was his ability to see the credit catastrophe for what it was and understand that extreme measures were needed to pull the financial system back from the abyss. It’s an ironic tribute to his legacy that, having helped saved the world, he’s leaving office as likely the most vilified Fed chairman ever. What his critics (the gold bugs in particular) seem to not realize is that their precious ideologies, the ones Bernanke flagrantly ignored, only make sense if they’re operating within a financial system that’s actually working. But back in 2008 and 2009, the system essentially stopped working. The commercial paper market seized up. Banks stopped trusting the value of each others’ balance sheets. Mighty institutions, from Goldman Sachs to General Electric, stood on the verge of insolvency. Remember? Good times. You can prattle on all you want about the outrage that is fiat-based currency, but back then Bernanke and Paulson had more pressing matters on their minds. And I’ll grant you a thousand times over that, in a normal environment, policies like quantitative easing can be dangerous and misguided. But that wasn’t a normal environment. Extraordinary measures were required, and the country should be grateful that Bernanke and Paulson had the vision to see that. It hasn’t helped any, by the way, that since the recession the White House has pursued policies that are apparently designed to suppress economic growth. Yes,yes, the Fed still has a huge challenge ahead of it as it winds down QE. But that’s nothing compared what the Fed was up against six years ago. In the end, Ben Bernanke helped save the world from financial Armageddon. He’s to be saluted. What do you think? Let me know!