The editors of Time magazine have selected current Federal Reserve Chairman Ben Bernanke as their Person of the Year 2009 for his decisions to loosen monetary policy in an effort to avoid another Great Depression.
The story of the year was a weak economy that could have been much, much weaker. Thank the man who runs the Federal Reserve, our mild-mannered economic overlord, Time editors stated in a commentary prefacing the story.
The former Princeton Professor, chosen by President Bush and approved by the U.S. Senate in 2006 to head the U.S. central bank had studied the 1930s depression and concluded that the U.S. could have avoided it if the Federal Reserve had not blocked the money supply, let banks fail and told Americans to save more.
Bernanke didn't just learn from history; he wrote it himself and was damned if he was going to repeat it, Time Managing Editor Richard Stengel wrote in a note explaining the magazine's choice.
Bernanke decided to do the opposite of what the Fed did back in the '30s: he would loosen the money supply as far as it would go, he would save as many banks as he could, and he wasn't going to hector the American public about pulling up their socks.