When Ben Bernanke steps down as chairman of the Federal Reserve this week, having presided over his final committee meeting, the sniping might stop. Every time he makes a public appearance in his Fed role there are pundits and politicians waiting to pour vitriol on his head. Critics of his eight-year stint give vent at the mention of his name, such is their anger at his concern for the unemployed and families threatened with the loss of their home. His rescue of the US financial system in 2008, and his part in defeating a global banking collapse, is put to one side by those who argue his policies since the dicey moments before and after the collapse of Lehman Brothers have undermined the dollar and slowed the recovery. Like a patient given a strong dose of painkillers, the US economy is considered by this vociferous group of rightwingers to be hooked on powerful drugs that, as time goes on, make it weaker, not stronger. A measure of the criticism is Mitt Romney's threat to sack him for the crime of zealously and recklessly printing money. Texas governor Rick Perry warned Bernanke against pursuing a monetary policy that would be "treasonous". On the left he is accused of rescuing the banks without strings attached. While it was Treasury secretary Tim Geithner's decision to underwrite the banking sector, Bernanke is regularly branded Lord Protector of Wall Street and its bonus culture. Born in 1953 into one of the few Jewish families in Dillon, South Carolina , Bernanke went to Harvard before teaching economics at Stanford and Princeton . A shy man and consummate academic, he jumped at the chance of making policy. In a few days he will step down with the thanks of his president, who has relied on cheap central bank funds to lubricate the economy in his battle with a cost-cutting Congress . Like Carney, Bernanke has embraced a new role for the world's central banks - to be the canary signalling not just inflationary pressures but also potential asset bubbles. This dual role was one he rejected in the early years at the Fed. Like his counterparts in the eurozone and the UK , he was deaf to fears that surging house prices and rocketing share values were bubbles ready to burst. It ranks as the chief criticism of his early years in the post. When trouble started he joined Geithner in the failed tactic of bolting together failed banks. But once they had been rescued, banks still needed help to perform their basic function. Lending was their stock in trade and needed to be supplemented by central bank funds. Bernanke adopted quantitative easing (QE), where the Fed bought up US government and mortgage debt, with the hope that financial institutions would then convert the proceeds into further loans to households and businesses. In the intervening five years he has thrown around $3tn at the US economy via QE to maintain a flow of credit to beleaguered households and businesses. There are many Bernanke watchers who believe he wanted to go even further. In the 1990s, while an economics professor at Princeton , he blasted the Japanese central bank for its timidity after the Tokyo property crash. He acquired the nickname Helicopter Ben for recommending it offset a large tax cut by buying an equivalent amount of government debt, a plan that he compared to a "helicopter drop of newly printed money". Congress was never going to allow it and as far as anyone knows it was never formally proposed, leaving Bernanke to steer a course between rightwing accusations of profligacy and charges from the Keynesian left that his timidity restricted growth and depressed the jobs market. Through it all he has refused to take on his critics in anything other than measured tones. The US is recovering strongly and the pace of QE expansion has slowed from $85bn a month. But Geithner's tactic of letting bankers resume business in a largely unreconstructed financial system - while asking the Fed to keep a watchful eye - is risky when banks refuse to adopt conservative strategies and workers rely on assets like shares and property to pay the bills. The Bernanke years could lead inexorably to another crash.
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