The Real Money Honey

Article excerpt

Byline: Michael Tomasky

Ben Bernanke takes fire from all sides. Which, in Washington, is a sign he's doing a pretty good job.

The phrases "Federal Reserve Bank" and "Valentine's Day" haven't appeared in too many sentences together. But this is the social-media age, and so it was perhaps inevitable that someone in the Twitterverse started a thread for people to send valentines to the Fed. "When I see your yield curves," one tweeter wrote, "I get too big to fail."

They got a huge kick out of it in that mysterious building down on Constitution Avenue, where jocularity and love are more typically in short supply. Not long before Valentine's Day, Fed chairman Ben Bernanke was up on Capitol Hill for another of his ritualistic lecture sessions from Republican lawmakers. House Budget Committee Chairman Paul Ryan badgered him about inflation (which does not exist now, but which Ryan and many other Republicans swear is coming in a big way). Another Republican upbraided him over a recent Fed report on the housing market that the lawmaker said stepped on Congress's toes. All this is to say nothing of the more visceral hatred Bernanke and the bank have inspired: those lusty chants of "End the Fed!" heard at Ron Paul rallies.

Dig beneath the level of political white noise, though, and you hear a different story--about a modest and even shy man who is one of Washington's quiet heroes. Bernanke's defenders insist that he has pursued surprising and bold policies in the face of scorching political opposition. "I think he's going to go down as one of the most creative chairs of the Fed ever," says Jared Bernstein, formerly Vice President Biden's chief economist.

When President Bush made him chair in 2006, Bernanke was a typical moderate-to-conservative Republican who was initially regarded as too academic and cautious. He understood macroeconomics, but he didn't have a great grasp of markets, some said, and he didn't get politics at all. Then the crisis hit. (Note: my sister, Susan Tomasky, is a director of the Cleveland Fed.)

There are critics, mostly on the left, who think Bernanke was way too slow to see what was happening. "As someone who'd sat on the Fed since the summer of 2002, he could hardly have been excused for not having seen the housing bubble before the summer of 2007," says the liberal economist Dean Baker, one of the few who did predict it all.

Other economists cut him more slack because the country was in such an unprecedented situation. …