Bernanke also did some succesful campaigning with his speech that said, modestly: "I, single handedly, killed the worst depression since the Great one". I think Ron Paul was more on the mark with this remark:
“The Federal Reserve, in collaboration with the giant banks, has created the greatest financial crisis the world has ever seen,” Representative Ron Paul, Republican of Texas, said at a House hearing last week in which Mr. Bernanke testified about the state of the economy.
Republican lawmakers portray the Fed as the embodiment of heavy-handed big government, and have called for scaling back the central bank’s regulatory powers.Exactly. Bernanke's policies are the same as the ones recommended by Paul Krugman, the rabidly liberal (lefty) columnist of the NY Times. So, there's no wonder Obama renominated him. There are other reasons too: you don't change horses in mid race, and if anything goes wrong (which is sure to happen) you have a handy fall man.
While many, including the doom prophet Nuriel Roubini, praise Bernanke for indeed saving us from a big depression, other depression specialists, like Anna Jacobson Schwartz (Milton Friedman's co-author on the depression) have a very detailed and professional critique of his policies:
Roubini, though, beside praising Bernankes handling of the crisis once it happened, also states that Bernanke failed to do anything to prevent the crisis in the two years he reigned prior to it's outburst, when many, including Roubini, were predicting it.
Mr. Bernanke seems to know only two amounts: zero and trillions. Before 2008 there were only moderate increases in the Federal Reserve’s aggregate balance sheet numbers, but since then the balance sheet has exploded by trillions of dollars. The increase was spurred by the Fed’s loans to troubled institutions and purchases of securities.Why is easy monetary policy such a sin? Because in such an environment, loans are cheap and borrowers can finance every project that they dream up. This results in excesses, and also increases the severity of the recession that inevitably follows when the bubble bursts.
I'm not optimistic about the economic recovery.