of Ben Bernanke, Chairman of the US Federal Reserve, as Time Magazine’s “Person of the Year” is unusual in that it is a
case of true merit being recognised by the media.
In the early autumn of 2008, many supposedly-informed people
were in a state of hysteria. Highly paid commentators were predicting – some
with panic, some with open glee – the total collapse of the global economy and
the end of capitalism.
That did not happen.
What did happen is that Bernanke got together with Hank
Paulson, then the Secretary of the Treasury, and George W Bush, then the
President of the United States, and came up with a plan to bail out the banks.
It was not a good plan, but it was a plan. They got all parties around a table
and, against the odds, managed to rush their plan through a hostile Congress.
The deficiencies of that plan have become more than apparent
since then, but that misses the point – which was that at the crucial moment
someone showed leadership. That is often all it takes to end a crisis of
Many in the media give President Obama credit for this – but
they are the people who give Barack Obama credit for everything. Some were
praising the success of his stimulus package before hardly any of the money had
The fact is that, as far as the credit crunch is concerned,
the moment of crisis had passed before Mr Obama took the Oath of Office –
perhaps even before his election in November. President Obama himself
recognised this when he nominated Mr Bernanke for another term as Chairman.
Yet that nomination has run into opposition on Capitol Hill.
They blame Mr Bernanke for helping to cause the crisis in the first place.
This is unfair. No one in authority comes well out of the
pre-crisis period – not Mr Bernanke nor Mr Paulson nor Mr Bush nor his
Democratic critics, who controlled Capitol Hill then as now. They all
contributed to the crunch in different ways – but none of them caused it. That
was the bankers – and, being honest, those of us who took their money.
That Mr Bernanke is, on balance, a considerable force for
good would be proved beyond doubt only if Congress were stupid enough to reject
his nomination: the crash would be back.