At least Bernanke gets the grade order right

In a long interview with Freakonomics, Bernanke has the chance to self-grade:

DUBNER: Alright, so if you’re going to give yourself a letter grade for before and after, what are your letter grades?

BERNANKE: C- and A-, something like that.  But I don’t — it’s really not up to me.  I think that, you know, others have to make those judgments.  In the end, we did stabilize the system and the economy has recovered.  And the U.S. recovery, while not everything we would like, has been pretty good compared to other industrial countries.

He´s too easy on himself. He started bungling from day 1 at the job. The errors quickly accumulated, giving rise to “Great Recession”. So that´s not a C-, but a big F.

I think George Selgin would do the same. From his review of Bernanke´s The Courage to Act, we read:

…a central bank that allows the overall volume of spending to collapse has blown it, no matter how much emergency lending it undertakes…

Given his failing grade in the “first exam”, he should have strived for an A+ in the “second exam”. But no, he managed at best a C-. So overall, he failed BIG!  It appears Yellen wants to compound on the mistakes!

2 thoughts on “At least Bernanke gets the grade order right

  1. Ben
    Not sure his C- is due to the pre-crisis inflation record, but pre-crisis “banking bubble” that the Fed failed to “spot”. The central bankers need to blame the banks for the crisis otherwise how to justify the huge post-crisis re-regulation of the banks. And it kind of helps that the banks were the main culprits, an F if you like, and the bankers are then only relatively bad and can afford to take some of the rap, the C- for the failed regulation.

    The A- post crisis is all about rescuing the banks, and thus the economy, having that “Courage to Act”. The main mission of central banks is thus financial stability not even fighting inflation.

    See this French paper to the European Parliament I linked to before, partially dismissing NGDP Targeting as not being relevant to this goal, it’s the new orthodoxy:
    https://polcms.secure.europarl.europa.eu/cmsdata/upload/97b399ef-fb46-48af-bc64-960c8dd18d62/OFCE_FINAL.pdf

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