The Post told readers today that Federal Reserve Board chairman Ben Bernanke "response to the financial crisis has won him plaudits from congressional Democrats who view him as pragmatic and non-ideological." That may be true, but it might also be worth mentioning that Bernanke completely missed the housing bubble. Furthermore, even after it began to burst he repeatedly downplayed its consequences.
In March of 2007, after the first shock waves from the subprime market were being felt, Bernanke assured Congress that the fallout was likely to be restricted to the subprime market. The following year, after Bear Stearns failed, he told Congress that he didn't see another Bear Stearns out there. Six months later, Lehman Brothers and AIG failed. If Bernanke had been quicker to recognize the severity of the problems created by the collapse of the housing bubble, he may have been able to prevent much of the current financial chaos.
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