Ben Bernanke - TIME Person of the Year!?!

You seriously have to be kidding me!?! This has to be some kind of a sick joke...right?

http://www.time.com/time/specials/packages/article/0,28804,1946375_1947251,00.html

Ben Bernanke

By MICHAEL GRUNWALD Wednesday, Dec. 16, 2009

A bald man with a gray beard and tired (and evil) eyes is sitting in his oversize Washington office (bought with your dollars), talking about the economy (and how he's destroyed it). He doesn't have a commanding presence (just a cold one). He isn't a mesmerizing speaker (true, look at any one encounter he's had with Representatives Paul or Grayson). He has none of the look-at-me swagger or listen-to-me charisma so common among men with oversize Washington offices (Why? He's got our money). His arguments aren't partisan or ideological (they're all about lining the pockets of the rich); they're methodical, grounded in data and the latest academic literature. When he doesn't know something, he doesn't bluster or bluff (He says, "I don't know exactly which banks the money went to). He's professorial, which makes sense, because he spent most of his career as a professor.

He is not, in other words, a typical Beltway power broker (He's a Wall Street broker). He's shy. He doesn't do the D.C. dinner-party circuit; he prefers to eat at home with his wife, who still makes him do the dishes and take out the trash (hah!). Then they do crosswords or read. Because Ben Bernanke is a nerd (and a thief).

He just happens to be the most powerful nerd on the planet (scary, but true).

Bernanke is the 56-year-old chairman of the Federal Reserve, the central bank of the U.S. (contrary to popular belief, the Federal Reserve is not part of the government - it's an independent bank), the most important and least understood force shaping the American — and global — economy (making the rich richer and the poor poorer). Those green bills featuring dead Presidents are labeled "Federal Reserve Note" for a reason: the Fed controls the money supply (and the outflow of money to foreign banks and investors). It is an independent government agency that conducts monetary policy, which means it sets short-term interest rates — which means it has immense influence over inflation, unemployment, the strength of the dollar and the strength of your wallet (it can do far more than that). And ever since global credit markets began imploding, its mild-mannered chairman has dramatically expanded those powers (again, scary, but true) and reinvented the Fed.

Professor Bernanke of Princeton was a leading scholar of the Great Depression (and has brought to the doorstep of perhaps our next Great Depression). He knew how the passive Fed of the 1930s helped create the calamity (history is repeating itself) — through its stubborn refusal to expand the money supply and its tragic lack of imagination and experimentation. Chairman Bernanke of Washington was determined not to be the Fed chairman who presided over Depression 2.0. (but he not only is doing so, but also aided in its design) So when turbulence in U.S. housing markets metastasized into the worst global financial crisis in more than 75 years, he conjured up trillions of new dollars and blasted them into the economy; engineered massive public rescues of failing private companies (and foreign banks); ratcheted down interest rates to zero; lent to mutual funds, hedge funds, foreign banks (yup), investment banks, manufacturers, insurers and other borrowers who had never dreamed of receiving Fed cash; jump-started stalled credit markets in everything from car loans to corporate paper; revolutionized housing finance with a breathtaking shopping spree for mortgage bonds; blew up the Fed's balance sheet to three times its previous size; and generally transformed the staid arena of central banking into a stage for desperate improvisation. He didn't just reshape U.S. monetary policy; he led an effort to save the world economy (and managed to blow the American dollar out of the water).

No wonder his eyes look tired (he's been up late spending all that money).

The last Fed chair, Alan Greenspan, inspired an odd cult of personality. Bernanke hoped to return the Fed to dull obscurity (secrecy, don't let him fool you). But his aggressive steps to avert doomsday — and his unusually close partnerships with Bush and Obama Treasury Secretaries Henry Paulson and Timothy Geithner (Wall Street pals) — have exposed him and his institution to criticism from all directions. He's Bailout Ben, the patron saint of Wall Street greedheads, or King Ben, the unelected czar of a fourth branch of government. He's soft on inflation, bombarding the country with easy money, or soft on unemployment, ignoring Main Street's cries for even more aggressive action. Bleeding-heart liberals and tea-party reactionaries alike are trying to block his appointment for a second four-year term. Libertarian Congressman Ron Paul is peddling a best seller titled End the Fed. And Congress is considering bills that could strip the Fed of some of its power and independence.

So here he is inside his marble fortress, a technocrat in an ink-stained shirt and an off-the-rack suit, explaining what he's done, where we are and what might happen next.

He knows that the economy is awful (he should, again, he designed it), that 10% unemployment is much too high (you think?!?), that Wall Street bankers are greedy ingrates (you can smell your own), that Main Street still hurts (Main Street doesn't even exist anymore - F*!& Walmart!!!). Banks are handing out sweet bonuses again but still aren't doing much lending (A "great" use for bank bailouts). Technically, the recession is over, but growth has been anemic and heavily reliant on government programs like Cash for Clunkers, not to mention cheap Fed money. "I understand why people are frustrated (No you don't!). I'm frustrated too," Bernanke says. "I'm not one of those people who look at this as some kind of video game. I come from Main Street, from a small town that's really depressed. This is all very real to me" (nowhere near as real as it is for us!).

But Bernanke also knows the economy would be much, much worse if the Fed had not taken such extreme measures to stop the panic (...). There's a vast difference between 10% and 25% unemployment, between anemic and negative growth. He wishes Americans understood that he helped save the irresponsible giants of Wall Street only to protect ordinary folks on Main Street (how has it helped Main Street?). He knows better than anyone how financial crises spiral into global disasters, how the grass gets crushed when elephants fall (how does sending money to foreign banks help?). "We came very, very close to a depression ... The markets were in anaphylactic shock," he told TIME during one of three extended interviews (You keep trying to tell people, "everythings ok now."). "I'm not happy with where we are, but it's a lot better than where we could be."

Bernanke also has thoughts about the economy's future — and we'll get to them soon. First, though, we should explain why his face is on the cover of this issue. The overriding story of 2009 was the economy — the lousiness of it, and the fact that it wasn't far lousier. It was a year of escalating layoffs, bankruptcies and foreclosures, the "new frugality" and the "new normal" (but that's improvement, right!?!) It was also a year of green shoots, a rebounding Dow and a fragile sense that the worst is over. Even the big political stories of 2009 — the struggles of the Democrats; the tea-party takeover of the Republicans; the stimulus; the deficit; GM and Chrysler; the backlash over bailouts and bonuses; the furious debates over health care, energy and financial regulation; the constant drumbeat of jobs, jobs, jobs — were, at heart, stories about the economy. And it's Bernanke's economy (ain't that the truth as unfortunate as that may be).

In 2009, Bernanke hurled unprecedented amounts of money into the banking system in unprecedented ways, while starting to lay the groundwork for the Fed's eventual return to normality (the Fed's economic coup). He helped oversee the financial stress tests that finally calmed the markets, while launching a groundbreaking public relations campaign to demystify the Fed (by denying congressional investigation and obliterating Federal Reserve transparency!?! - see H.R. 1207). Now that Obama has decided to keep him in his job, he has become a lightning rod in an intense national debate over the Fed as it approaches its second century.

But the main reason Ben Shalom Bernanke is TIME's Person of the Year for 2009 is that he is the most important player guiding the world's most important economy. His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivaled power over our money (and greedy)(scary but true once and again), our jobs, our savings and our national future (how do you all feel about that?). The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world (and the possible destruction of our future).



Peace.