Helicopter Ben Needs to Pick Up His Game

Federal Reserve Chairman Ben Bernanke is often characterized as a inflation-monger. There’s just one problem with that criticism. As David Leonhardt demonstrates in the New York Times, when it comes to inflation, Bernanke is a piker compared to most of his predecessors:

Inflation has averaged just 2.3% under his leadership (as officially measured), less than under Greenspan, Volcker, Burns, or Miller and only slightly more than under Martin.

It’s conceivable, of course, that inflation will take off in coming years, and the critics will be proven right. At this point, however, that’s nothing more than speculation. And before you make that bet, keep one thing in mind. Bernanke is the first chairman to have the ability to pay interest on excess bank reserves. That’s a powerful tool for keeping reserves out of the marketplace if the inflation genie threatens to come out of its bottle.

About Donald Marron 294 Articles

Donald Marron is an economist in the Washington, DC area. He currently speaks, writes, and consults about economic, budget, and financial issues.

From 2002 to early 2009, he served in various senior positions in the White House and Congress including: * Member of the President’s Council of Economic Advisers (CEA) * Acting Director of the Congressional Budget Office (CBO) * Executive Director of Congress’s Joint Economic Committee (JEC)

Before his government service, Donald had a varied career as a professor, consultant, and entrepreneur. In the mid-1990s, he taught economics and finance at the University of Chicago Graduate School of Business. He then spent about a year-and-a-half managing large antitrust cases (e.g., Pepsi vs. Coke) at Charles River Associates in Washington, DC. After that, he took the plunge into the world of new ventures, serving as Chief Financial Officer of a health care software start-up in Austin, TX. After that fascinating experience, he started his career in public service.

Donald received his Ph.D. in Economics from the Massachusetts Institute of Technology and his B.A. in Mathematics a couple miles down the road at Harvard.

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