The Great Preventer

Last week in the NY Times two top-notch economists debated Bernankes re-nomination chances. Nouriel Roubini, an economist from NYU who has gained fame for publishing a 12 step list the recession would go through before it became severe, argues that Bernanke was The Great Preventer. By taking creative steps, in Roubini's opinion, the Fed and Bernanke prevented Great Depression 2.0. The Bernanke Files agrees and would also like to point out that Bernanke can be assumed to have just as creative maneuvers to prevent inflation.

Anna Schwartz, a retired Professor from Chicago (boo, hiss, remember: Chicago schools of economic thought are synonymous with Libertarian, Fed-hating ideology), argues that Bernanke and the Fed failed to foresee the recession, failed to warn investors and failed to communicate their anti-recession plans to the public. But, uh, hello, are any of these things in the Fed's job description? Absolutely not. As is turns out, Schwartz was Milton Friedman's partner and has a general bias against the government, the Fed, and convertible money (money not backed by the gold-standard). Sorry, Schwartz, but you have to have a better argument than that the Fed didn't look into the crystal ball and prevent the future from happening.