I have nothing against Ben Bernanke. By all accounts he is a very decent person. His predecessor, Alan Greenspan left him with a time bomb just waiting to explode in the form of the housing bubble. The loss of $8 trillion in housing wealth was guaranteed to lead to a recession and the sort of financial meltdown that we are now seeing.
But, Bernanke did not help a very bad situation by denying its existence as long as possible. It is appropriate for reporters to ask him about his earlier comments (this statement was made in Congressional testimony less than a year ago).
At this point, the financial markets need credible analysis from the Fed, not happy talk. An important first step would be a move toward greater transparency. Why is the Fed letting banks borrow hundreds of billions of dollars in secret? What guarantees were given to J.P. Morgan as part of its takeover of Bear Stearns?
Bernanke has to start being open and honest in addressing the country's financial problems. Otherwise his words will have no weight. Reporters should demand a fuller accounting from Bernanke and the Fed.
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