Bernanke seems to have learned nothing from his time in Washington and is if anything acting even more inappropriately. He started his first term by blabbering after a couple of cocktails to Maria B at some party and created a stir in the markets. He failed to rein in excessive leverage at financial firms or unsafe mortgage lending, even though he had the power to do so. He then raised rates abruptly when he finally realized there was a housing bubble, instead of slowing letting it depressurize, thereby sending the mortage market into a tumble it still hasn;t recoverd from. Since real estate is so important to the economy, his incompetency has basically cost us trillions oif dollars and years of unemployment.
Now, chafing at congressional criticism, he is trying to turn the tables and blame congress. It is a dangerous game. The Fed's political independence has always been controversial on both sides of the aisle. Berbnake is the first chairman who was so dense he didn't understand that political independence is a two-side coin. Just as congress cannot dictate or pressure the Fed, the Fed itself must be scrupulous in staying above the political fray. Bernanke has clearly violated that trust, and the first order of business of the new republican president should be to demand his resignation.
