I think that’s right, and unless you were aware of the role of banking system collapse in creating the Great Depression you wouldn’t recognize the danger that Bernanke spotted in the Summer of 2008.
When Lehman began to implode and money market funds broke the buck you had the beginnings of a vicious spiral that could have spread all through the banking system if something wasn’t done to stop it.
TARP and other solutions were needed but the problem I think I see is that they weren’t designed properly and they allowed taxpayer funds to be looted. But that blame probably lies with Bush’s Treasury Secretary and his close ties to the financial community. I don’t think the program was managed by Bernanke.
>> unless you were aware of the role of banking system collapse in creating the Great Depression you wouldn’t recognize the danger that Bernanke spotted in the Summer of 2008 <<
Exactly. Due to his years of research on the issue, Bernanke probably had more expertise about banking panics and the associated market collapses than any other living person, with the possible exception of Anna Schwartz. In other words, it appears that he was exactly the right man, at the right place, at the right time.
Therefore, in spite of all the terrible criticisms that Newt Gingrich, Mitt Romney and others were leveling at Bernanke a few years ago, his aggressive policy at the Fed didn’t engender inflation, and it may have saved us from a 1930’s style depression. I think he need not worry about his place in history.