Tags: Cassidy | Obama | fired | Bernanke

Financial Writer Cassidy: Obama Should Have Fired Bernanke in 2009

By    |   Monday, 20 August 2012 12:50 PM

President Barack Obama put the economy and his own re-election at risk by failing to replace Federal Reserve Chairman Ben Bernanke when he had the opportunity in 2009, says John Cassidy, a writer for The New Yorker and columnist for Fortune.

“As the economy has sputtered badly over the past six months, the Fed chairman has failed to do anything about it,” Cassidy writes in Fortune.

“Even today he continues to equivocate. Looking back, Obama should have canned Bernanke.” His first term ended in early 2010.

Editor's Note: The Truth About the Economy — Government Documents Lead to Eerie Conclusion

To be sure, the Fed chairman dealt well with the 2008-09 financial crisis, Cassidy acknowledges.

“But Bernanke's performance since 2009 has been less impressive, and this year it's been pretty awful,” he argues.

Quite simply, the central bank should have eased policy further by now. “Rather than getting out ahead of events, which is essential given that there's always a lag between action and results, the Fed appears paralyzed,” Cassidy says.

So why hasn’t Bernanke acted? He and some other Fed officials say they need more evidence that the economic recovery is faltering before they act.

But unemployment of 8.3 percent and inflation below 2 percent argue for action now, Cassidy notes.

Still, many experts back Bernanke’s stance. It’s not clear that action by the Fed would do much to help the economy at this point. It can’t cut interest rates further, and the impact of quantitative easing already has begun to wane.

Editor's Note: The Truth About the Economy — Government Documents Lead to Eerie Conclusion

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Monday, 20 August 2012 12:50 PM
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