Rating the Bernanke Era

As the Federal Reserve Chairman prepared to step down, the encomiums rolled in. “The most successful tenure in Fed history,” said the S&P economist. Added a former Fed Governor: “He has been called, and I think justifiably so, the greatest central banker in history.” He was the man who saved the world, a genius, the maestro.

All of that praise was heard eight years ago this month for Alan Greenspan as he prepared to step down after 20 years leading the Fed. A mere two years later views of the Greenspan monetary era were very different, as the credit boom he did so much to create turned to mania, which turned to panic, which became a deep recession.

That reversal is worth keeping in mind now that the same extravagant praise is flowing for Ben Bernanke as he prepares to run his last meeting of the Federal Open Market Committee starting Tuesday. There is no doubt Mr. Bernanke has been one of the most consequential Fed Chairmen in history, but his legacy is still far from clear and is at best more mixed than the effusive praise suggests.


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