As chairman of the Federal Reserve, Ben Bernanke routinely took in stride verbal hits from lawmakers, journalists and even presidential candidates. Since launching a blog at the Brookings Institution last month, the onetime economics professor is firing back, taking on the Wall Street Journal's editorial page in his latest missive.
Ripping into an editorial published by the Journal late Tuesday entitled "The Slow Growth Fed," Bernanke on Wednesday ridiculed the newspaper's assertion that disappointing economic growth in the first quarter is evidence that the Fed's monetary policy is not working and should be discontinued.
The editorial's stance that the Federal Open Market Committee's projections of economic growth have been too high since the financial crisis "is true," writes Bernanke, who then snarls: "It's generous of the WSJ writers to note, as they do, that 'economic forecasting isn't easy.' They should know, since the Journal has been forecasting a breakout in inflation and a collapse in the dollar at least since 2006."
Bernanke goes on to lecture the editorial writers for drawing "incorrect inferences from the FOMC's recent over-predictions of growth," noting that while the Fed and private-sector economists have been too optimistic about growth, they have also been overly pessimistic about unemployment, which has fallen more rapidly than expected.
"Nobody claims that monetary policy can do much about productivity growth. Where it can be helpful is in supporting the return to full employment, and there the record has been reasonably good," Bernanke said.
Then, as he did while head of the Fed, Bernanke appealed for the nation to adopt a fiscal policy that he believes would bolster the economy: "I am waiting for the WSJ to argue for a well-structured program of public infrastructure development," Bernanke said, adding that Americans should not give up on monetary policy, "which for the past few years has been pretty much the only game in town as far as economic policy goes."
Bernanke started his blog at the end of March, and quickly took aim at Tennessee Republican Bob Corker. Two years after the senator accused Bernanke and his colleagues at the Fed of "throwing seniors under the bus" by keeping interest rates low, civilian Bernanke used his blog to fire back, writing that the "best way to improve the returns attainable by savers was to do what the Fed actually did," keeping rates low and allowing the economy to recover to the point of producing healthier investment returns.
Several days later, Bernanke got into a wonky back-and-forth with former Treasury Secretary Larry Summers and Summers' thesis on secular stagnation.