How will History Remember Bernanke?

Earlier today, Rasmussen released the results of its latest opinion poll regarding Fed Chair Ben Bernanke. Aside from highlighting the average American's apathy and/or ignorance of the Fed's role in the economy (39% of respondents didn't have enough information to even have an opinion on whether or not Bernanke should be replaced), the numbers emphasize that Bernanke never had even a fighter's chance to reach the popularity levels of his predecessor.

While sometimes applauded for his creative thinking, Bernanke is more often maligned for everything from inaction to overreaction. However, the former Princeton professor and expert on the Great Depression inherited an economy that was already showing signs of the bubbles that are now all the more apparent with the gift of hindsight. Once the housing market, and subsequently the financial markets, began their downward spiral, Bernanke at least reacted quickly. Though it is impossible to know what impact his moves made, or what would have happened if Bernanke, the Treasury Department and successive administrations had reacted to the troubles differently, one has to credit the Fed with developing creative solutions to issues on a real time basis as the system neared the precipice.

It is also worth mentioning that previous Fed Chair Alan Greenspan, still viewed as one of the best if the results in the poll are any indication, fuelled many of the current fires with very loose monetary policy and a look-the-other-way approach to exotic mortgage securities. Whatever one thinks of Bernanke's reactions to issues, one has to accept that they weren't issues of his own creation. However, for better or worse, Greenspan will always have the benefit of having presided over a tech-fuelled boom, while Bernanke was handed the thankless job of holding together a crippled financial system with chewing gum and prayers.

It is possible that political pressures and the potential to start fresh will lead to Bernanke not being reconfirmed. If so, few Americans will lose sleep over the change. It is also possible that the 'Bernanke put' and current loose monetary policies are creating a whole new set of problems for the next Fed Chair or indeed Bernanke himself. However, Bernanke was probably never as bad as these poll numbers indicate, and it will be interesting to see if the ultimate lens of history is kinder to the economic historian who tried to mop up the biggest financial woes in two generations, or the 'maestro' who, in large part, created them. Unfortunately it seems that it is the latter who will continue to be seen as the wizard while the former may cosider himself lucky to be, at best, remembered as a casualty of his times.