In an op-ed for the NY Times the bearish Nouriel Roubini endorsed the reappointment of Ben Bernanke as the Fed Chairman citing his ability and initiative to implement radical and unconventional Fed policies that have rarely been undertaken before as reason enough for his reappointment. However, he gave a few caveats to his endorsement. One of which reads:
Mr. Bernanke, a Fed governor in the early part of this decade, supported flawed policies when Alan Greenspan pushed the federal funds rate (the policy rate set by the Fed as its main tool of monetary policy) too low for too long and failed to monitor mortgage lending properly, thus creating the housing and credit and mortgage bubbles.
He added three other mistakes he and the Fed made when the crisis began.
Find out what the three are HERE.
Sorry to spoil it, but he closed the op-ed by saying:
…Mr. Bernanke deserves to be reappointed so that he can manage the Fed’s exit from its most radical economic intervention since its creation in 1913.
To which I add, “And we can see how successful his policies would be. For the policies of preventing a Great Depression 2.0 is merely half of the story. How he prevents a run up on inflation and another asset bubble as he exits the programs is the other half, or even more.”