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The Beatification of Ben Bernanke
The Washington Post gave a glowingly positive account of Ben Bernanke's efforts to deal with the economic crisis. Missing from this discussion was any mention of the fact that he deserves a large part of the blame for this crisis.
Bernanke was a persistent and vigorous bubble denier, first in his capacity as a member of the Board of Governors and then on his becoming Fed chair in January of 2006. Even as the bubble began to unwind in the winter of 2007 he gave assurances that the problems would be contained in the subprime market. After he engineered the takeover of Bear Stearns in March of 2008, Bernanke told Congress that he did not see another Bear Stearns out there. Needless to say, he was surprised by the collapse of Lehman and the market's response six months later.
It might have been worth including some acknowledgment of the fact that, in addition to being the person trying to lead us out of this crisis, Bernanke was also one of the people who deserves the most blame for leading us into the crisis.
The media have a tendency to write glowing accounts of people in positions of power in the United States. I recall when a person I knew quite well was given a high position, the news reports described this person as being brilliant and having a sharp intellect. I personally liked and respected this person, but I doubt very much that anyone who knew this person would have made a point of talking about their brilliance or sharp intellect.
Unfortunately, reporters often seem to believe that it is their job to promote confidence in the people in power. It isn't.
--Dean Baker
COMMENTS (16)
Dean,
One simple has to look at the eight years of glowing reportage portraying our buffoon in chief as something of a determined, bold leader to corroborate you assessment of the Press.
Posted by: edhopper | April 9, 2009 9:31 AM
Of course you're right Dean, but it's no surprise so few will address it.
If there's been one economic truth in our lifetime, it's that there's not much reward in being among the first to speak truth to power.
Posted by: bailey | April 9, 2009 9:41 AM
Bernanke looks and sounds smart and I am certain his IQ and SAT scores would run rings around mine. But he has proven to know absolutely nothing about how markets work. He has consistently misread the economy, fearing inflation when the credit markets were imploding, and cutting interest rates when it was a collateral problem. You can blame the press, but you can also blame the economics profession. Even now, as they all propose reregulating the markets, and in most cases to good effect, no one is focused on the mismanagement of policy -- ignoring credit growth because inflation was low -- and how to keep that from occurring again. We can chastise the "street" as much as we want, they are an easy villain in this environment, but the financial sector was charged with intermediating an ever increasing inflow of foreign capital hunting for yield. because yields were too low with the trade deficit so high, the yields needed to be manufactured and the street factories did just that.
Posted by: steve | April 9, 2009 10:18 AM
Propaganda...pure and simple. Let's not dismiss the possibility that the Post was approached to put out a feel good story by the administration. Since the birth of this nation, those in power have understood the power of the press.
Posted by: Doug | April 9, 2009 10:38 AM
The topic of "beat sweeteners" has been mentioned elsewhere in the blogosphere this week. I think the article on Bernanke looks like one.
Posted by: PeakVT | April 9, 2009 11:25 AM
I just discovered Mr. Baker on a CNN Book discussion replay from Jan 27, 2009 last night. I believe he was discussing "Plunders and Blunders". He is now at the top of my list for Economic reporting. We could use more like him in some Financial firm Board rooms.
Posted by: H.Bisbee | April 9, 2009 11:45 AM
There is more to the glorification of Fed chairmen than the usual media adulation for those in power. Banks and the finance industry in general prefer to have power in the hands of a finance-friendly "independent" agency than congress, and thus they pay in one way or another for propaganda exaggerating both the wisdom of the Maestros and their capacity to deal with crises.
It is sad that so many "liberal" economists (not Dean) fall in with this propaganda.
Posted by: skeptonomist | April 9, 2009 12:30 PM
Yeah, and that newspaper also beatified Alan Greenspan.
If an arsonist starts a fire, and then tries to extinguish it, do we praise the arsonist?
The Washington D.C. elites are a world unto themselves. Completely out of touch with America.
Posted by: tyuk | April 9, 2009 1:46 PM
I had to chuckle: The link on the opening page has changed "beatification" (a step in the process to sainthood) to "beautification" (a makeover, especially as done with wildflowers by Lady Bird Johnson)!
Posted by: Sue | April 9, 2009 1:51 PM
thanks for this!
Posted by: gabrielle | April 9, 2009 2:14 PM
Please arrange in descending order the adjectives that best describe our media:
Clueless
Delusional
Destructive
Obsequious
Posted by: Matt Heil | April 9, 2009 2:38 PM
Gee.
And the newspaper industry can't understand why its dying?
It's target audience are ambitious middle school student body presidents, and they don't read newspapers anymore.
Posted by: some guy in a cube | April 9, 2009 8:49 PM
I second that. First he should be blamed for not having seen the crisis coming, not doing adequate monitoring of the risks while in the process of the risks being built up.
He further deserves to be blamed for making all wrong calls (housing bubble contained, economy rosy next quarter etc.) and trying to run his thesis experiment on the U.S.tax-payer.
In fact given his performance, forget giving him a glowing report IT IS A WONDER HE IS HOLDING HIS JOB STILL. In a true capitalist country he would have been long gone! This can happen only in a SOCIALIST USA
Posted by: killben | April 10, 2009 8:58 AM
Also journalists have a fairy tale fetish of casting everything in simplistic terms of good and evil, heroes and villains. No shades of grey. I guess it adds drama and excitement for an American public that wants to see a chase scene in every script.
Posted by: Diogenes | April 10, 2009 10:41 AM
I love your work Mr. Baker. As for your correct analysis...
Just the Corporate News Media doing its job...
Spreading the myth narrative and propaganda a la Pravada or the Ministry of Propaganda.
As for the financial problems of the Wash Post, the NY Times and the media industry as a whole... I have a friend that likes to say: "You did it to yourself, man."
Posted by: Problem Is | April 10, 2009 12:09 PM
Is depression here or not? not very clear. But if you look at the past history recessions and depressions come and go. (see for instance,
http://www.recessioninfocenter.com
Economies go through cycles and recession is part of the cycle. Too much government interference can backfire and it seems like that's what the governmetn is doing now
Posted by: Jeff | April 11, 2009 4:36 PM