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A Note of Caution

Personally, I think President Obama should have fired Bernanke when he took the reins for some of the colossally inaccurate comments he made publicly in the lead-up to the crisis -- not because I think Bernanke is a bad guy or because his likely successor would have done anything better or different. I just think we need to have some measure of accountability at that level when people get things so wrong.

That said, I do buy the argument that the actions Bernanke took during and after the crisis were necessary for preventing a more calamitous financial panic.

The bottom line is Bernanke inherited a disastrous situation. While he hasn't overseen a strong economic recovery yet, he did take decisive, extraordinary and historic actions that helped prevent the financial system from going completely over the cliff.

Bernanke is famously a student of the Great Depression, and he did things differently in 2008-2009. As a result, we're experiencing a Great Recession but not a Great Depression. Still, that doesn't mean Bernanke's actions won't have consequences.

Loose monetary policy does raise the risk of a classic case of runaway inflation, which would be horrible, but it can also grease the tracks for speculative bubbles in financial markets that ultimately do real economic harm and result in great costs to the public.

Right now, global economic growth and U.S. corporate earnings growth are slowing, and numerous economic indicators are showing weakness, but major stock indices are hovering near all-time highs. Shares of Apple (AAPL) hit new all-time highs on Friday, and investors are clambering into high-yield bonds and other risky assets in search of decent yields.

Gluskin Sheff analyst David Rosenberg notes that "lending to consumers with subprime credit records is surging and makes up more than 25% of all new car loans -- actually exceeding the prior peak bubble levels in 2007."

Meanwhile, U.S. asset-backed securities issuance is exploding, with more than $7 billion in ABS deals expected in the next several days and putting the market on track for its fourth busiest week of the year, according to Dealogic.

Is the Fed unleashing new speculative bubbles that are going to lead to another crash? I have no idea, and I sympathize with the difficult options that are facing Bernanke right now.

But that leads me to my second conviction: Bernanke shouldn't be shouldering the burden for the U.S. policy response to the weak economy.

The right lever to pull now for policy action in the fiscal realm lies with the U.S. Congress. Its failure to take action is the real travesty in all this.

Follow me on Twitter @NatWorden.

At the time of publication the author had a position in AAPL.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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