) --I'm sick of hearing all the backseat drivers in the Senate with their 20/20 rearview vision taking potshots at
Chairman Ben Bernanke.
It's so easy for them to roll out the "woulda, coulda, shoulda" rhetoric now, when the financial crisis is under control and the economy is stabilizing.
I don't remember hearing so many brilliant ideas flowing from Congress when the crisis hit, when Bernanke and his team at the Fed sprang into action to prevent a repeat of the Great Depression. I do, however, remember the Fed taking decisive action quickly.
Are there things that could have been done differently? Of course. Bernanke himself acknowledges there are things he would have done another way if he had known then what he knows now. But he didn't. How could he? This was an unprecedented catastrophe stoked in no small measure by political and regulatory forces beyond the Fed's control.
That's right -- the very senators throwing stones today from their glass houses are complicit in creating the conditions that caused the financial collapse.
The support for loosening mortgage requirements came from both parties in both houses of Congress along with a decade's worth of White House occupants from Clinton to Bush.
Everyone wanted to make it easier for all Americans to own a home. Sounds good, but it turns out that not every American is ready for that responsibility.
How about this for a little back-seat driving -- why didn't lawmakers realize that loosening restrictions on lending requirements could snowball into such a disaster?
Why didn't the Senate question the risk of encouraging the likes of
Bank of America
and other mortgage originators to provide more subprime loans.
Why didn't they question the loosening of restrictions on financial backing provided by the quasi-government (now fully government) agencies known as
All of that excess, which Congress fully embraced, led to an unprecedented situation that required the unprecedented actions Bernanke took.
It's easy now to reconsider whether
should have been allowed to fail or whether the Fed should have begun offering essentially free money to everyone from
to General Motors' GMAC unit.
But all of this brilliant hindsight ignores the fact that the only reason we have the luxury today to second guess the emergency actions Bernanke took back then is because Bernanke's approach worked. However flawed some of the individual reactions may have been, there's no questioning that we're better off today than we were a year ago.
So I say thank you, Ben Bernanke. You've earned the right to show what you can do for the economy when there isn't a crisis.
--Written by Glenn Hall in New York.
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