Perhaps Time was reluctant to give it to Barack Obama two years in a row, but Obama didn’t even make the top five in this year’s competition. Ben Bernanke got selected despite having done most of the work in rescuing the financial sector last year, and despite the fact that Congress may give him their most reluctant blessing for any Fed chairman in history. In fact, as Congress looks to duck responsibility for the housing bubble and collapse it created, Bernanke has been one of their scapegoats:
Bernanke is the 56-year-old chairman of the Federal Reserve, the central bank of the U.S., the most important and least understood force shaping the American — and global — economy. Those green bills featuring dead Presidents are labeled federal reserve note for a reason: the Fed controls the money supply. It is an independent government agency that conducts monetary policy, which means it sets short-term interest rates — which means it has immense influence over inflation, unemployment, the strength of the dollar and the strength of your wallet. And ever since global credit markets began imploding, its mild-mannered chairman has dramatically expanded those powers and reinvented the Fed.
Professor Bernanke of Princeton was a leading scholar of the Great Depression. He knew how the passive Fed of the 1930s helped create the calamity — through its stubborn refusal to expand the money supply and its tragic lack of imagination and experimentation. Chairman Bernanke of Washington was determined not to be the Fed chairman who presided over Depression 2.0. So when turbulence in U.S. housing markets metastasized into the worst global financial crisis in more than 75 years, he conjured up trillions of new dollars and blasted them into the economy; engineered massive public rescues of failing private companies; ratcheted down interest rates to zero; lent to mutual funds, hedge funds, foreign banks, investment banks, manufacturers, insurers and other borrowers who had never dreamed of receiving Fed cash; jump-started stalled credit markets in everything from car loans to corporate paper; revolutionized housing finance with a breathtaking shopping spree for mortgage bonds; blew up the Fed’s balance sheet to three times its previous size; and generally transformed the staid arena of central banking into a stage for desperate improvisation. He didn’t just reshape U.S. monetary policy; he led an effort to save the world economy.
Time then launches into Bernanke’s heroic efforts to save the world economy by propping up Wall Street — but that was a good argument for making Bernanke the PoY in 2008 rather than 2009. The Fed took its most dramatic action last year, but many fundamentally misunderstood the effort. While people were shrieking for the heads of Wall Street (and later arranging for protest tours of AIG executives’ homes), Bernanke understood that a total collapse of the financial system was in no one’s interest.
This year, though, the Fed has hardly been the force in finance. Democrats have undermined the dollar by spending in a manner that shames drunken sailors. They have a regulation package passing through Congress that would give politicians even more power to warp markets for social engineering. While derivatives need better oversight, Congress and the Obama administration are putting the crisis to use in order to go far beyond reasonable regulation into a form of corporatism for the banking and financial sectors.
Who were the other newsmakers that came up short in Time’s selection process?
- General Stanley McChrystal
- Nancy Pelosi
- The Chinese worker
- Usain Bolt
If I were Barack Obama, I’d be a little embarrassed that the Chinese worker and Usain Bolt kept me out of the top five. After all, any President of the United States is normally a bit more influential than a sprinter and the workforce of a developing country. But Obama was supposed to be transformative; he was supposed to “restore our standing in the world,” make the oceans recede and the planet cool, and provide Hope and Change not just to America but to the world.
At least Obama made the “People who Mattered” list … at number 12. He’s behind Adam Lambert, Jon and Kate Gosselin, and Lloyd Blankfein, the CEO of Goldman Sachs. Obama is eight positions below his own chief of staff, Rahm Emanuel, who put a lot more effort into the legislative agenda than Obama himself did. Obama made himself almost irrelevant to his own set of priorities, passing the buck to Nancy Pelosi instead — and paying a big price on both Porkulus and ObamaCare for doing so.
Somehow, I think Time’s grade for Obama came in at something less than a “good, solid B-plus.”
Who would be your suggestion for Hot Air readers’ Person of the Year?