March 29, 2013, Wall Street Journal, Jeff Hummel reviews Ben Bernanke’s book. Key points:
- Bernanke identifies three primary functions of the Federal Reserve, and yet doesn’t include its role in the quantity of money in circulation.
- He discusses the gold standard, suggesting the long run gains of a gold standard are counterbalanced by the short-run fluctuations (presumably disruptions) it causes.
- Bernanke concedes the bank exacerbated the Great Depression, and caused the Great Inflation of the 1970s, but missed citing a number of equally obvious economic distortions caused by the Fed in its history.
- While citing Too Big To Fail as creating perverse incentives, he doesn’t discuss moral hazard. He says the real problem of the late 2000′s was “nobody was in charge.” By inference, he has saved the day as the guy in the white hat riding to our rescue.
- Mr. Bernanke shows ”astonishing faith in the ability of government to outperform the market in pricing risk.”
- And finally, Mr. Bernanke’s views reflect his “focus on interest rates as the sole indicator of monetary policy, his targeted but sterilized bailouts, his paying interest on reserves, his expanding Fed assets to include mortgage-backed securities, and his efforts to manipulate the yield curve on Treasurys. In short, under Ben Bernanke central banking is becoming the new central planning.