In a FT op-ed, Stephen Roach presents 'The case against Bernanke.' Roach calls the reappointment 'short-sighted'; I think his criticism is too fixed on the now distant past.
He argues that despite Bernanke's aggressive and creative response to the crisis, his weaknesses and ideological orthodoxy helped create this mess:
It is as if a doctor guilty of malpractice is being given credit for inventing a miracle cure.
He goes on to say that the jury is still out on whether the Fed's crisis response will work in restoring growth and stability. This is a sensible argument, but surely Bernanke deserves the chance to finish the job. A more appropraite criticism would be that Bernanke's 'philosophical conviction' is ill-suited to influence and implement financial sector reform. But even on this point Roach's argument falls short, as Bernanke has demonstrated an incredible intellectual flexibilty and ability to depart from the pre-crisis orthodoxy.
A second-term should not be seen as rewarding the failures of pre-crisis Bernanke. Instead, it should be welcomed as a vote of confidence in a man transformed by the crisis and using every measure in his monetary toolbox (and making some new tools up along the way) to end it.
