Commentary: Paul Krugman wants Bernanke to have a second term. He admits that Krugma has become complacent, looking at this financial crisis through the eyes of the bankers, but yet, should Bernanke not be re-appointed, “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.”
Krugman is the Fed’s greatest apologist. He believes the Fed simply has not done enough. He wants immediate recovery and printing more money, lots and lots of it is the solution. What Krugman will perhaps never understand is that after an earthquake, we re-think how to better re-build. My suggestion: End the Fed! Let’s start over!
Washington has suddenly noticed public rage over economic policies that bailed out big banks but failed to create jobs. And Mr. Bernanke has become a symbol of those policies.
In the end, I favor his reappointment, but only because rejecting him could make the Fed’s policies worse, not better.
It’s harsh but true to say that he’s acting as if it’s Mission Accomplished now that the big banks have been rescued.
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.
And it’s the Fed’s responsibility to do all it can to end that blight.