Bernanke might will be a hero

Don't judge him, yet.

It's Not Time To Judge
Bernanke Yet

By JON HILSENRATH
January 29, 2008; Page C1, WSJ

Ben Bernanke can't get a break.

Two weeks ago, the Federal Reserve chairman's critics complained he was standing idly by while the markets sank, and they clamored for more-aggressive action. Last week, when he did what they asked, they called him a pawn of fickle investors. Had he done nothing, the same critics probably would have said he was ignoring the potential economic damage of a stock-market collapse.

In the end, all this hand-wringing about Mr. Bernanke's style and demeanor will be long forgotten if the Princeton professor gets his economics right. He's betting he can head off a recession by quickly lowering interest rates, possibly again tomorrow after the Fed meets. And he's betting he can do it without igniting inflation.

It's a stark choice and stands in clear contrast to his counterpart at the European Central Bank, Jean Claude Trichet. Mr. Trichet, who says he's more worried about inflation, hasn't moved rates at all.

It probably doesn't help Mr. Bernanke that he has to manage the situation while his former boss, Alan Greenspan, and potential successor, Lawrence Summers, chime in with opinions from places like Davos and from book tours.

If the U.S. economy somehow gets out of this mess without a recession and with inflation under control, Mr. Bernanke will be a hero regardless of what market critics say now. Wall Street might give his policies a chance before writing him off.