Give the Washington Post credit, in its article on Ben Bernanke's reappointment as Fed chair, it did point out that Mr. Bernanke bears considerably blame for getting us into this economic crisis in the first place. While all the other reporting emphasized his efforts to prevent a financial collapse over the last year, only the Post noted that Bernanke consistently ignored the risks building up as a result of the growth of the housing bubble. While Bernanke bears less responsibility than Greenspan, he was a Fed governor from 2002 to 2006, and then head of President Bush' Council of Economic Advisors, until he took over as Fed chairman in January of 2006. There were few people better positioned than Bernanke to head off the growth of the housing bubble. None of the reporting mentioned the secrecy surrounding the Fed's lending policies. Bernanke has refused to make any information public about who has received loans under the various spending lending facilities created by the Fed over the last two years, or under what terms. This is the topic of a lawsuit by Bloomberg, which the Fed lost yesterday in district court. This secrecy has also been a big factor motivating most members of the House to sponsor a bill calling for a GAO audit of the Fed. It would have been appropriate to mention this issue in a discussion of the case for Bernanke's reappointment.
--Dean Baker
