Is Bernanke the “most inflationary” Fed chairman in history?
Federal Reserve Chairman Ben Bernanke isn’t terribly popular among Republican presidential candidates. Here, for instance, was Newt Gingrich last night: “I would fire him tomorrow. I think he’s been the most inflationary, dangerous and power-centered chairman of the Fed in history.” But is this true? It doesn’t appear to be. Jodi Beggs examines the inflation records of Fed chairman since the Federal Reserve was created in 1914:
It’s true Bernanke’s tenure has seen more inflation than the chairmen who presided over massive deflation at the start of the Great Depression. But other than that, what stands out is the historically low amount of inflation under Bernanke’s Fed, particularly since 1970.
Now, perhaps you could argue that this is not for lack of trying. Mitt Romney took this tack when he said, “I think Ben Bernanke has overinflated the amount of currency that he’s created.” He seems to be implying that Bernanke’s Fed has expanded the money supply at an unprecedented rate. But that doesn’t seem to be true either. Here’s Beggs: “My calculations on historical money supply numbers indicate that Arthur Burns, not Bernanke, was the most expansionary Fed chair in recent history, and Bernanke is actually kind of middle of the road in terms of overall monetary expansion.”
For more context, here’s David Leonhardt noting that a sizeable chunk of economists think Bernanke’s actually been too hawkish about inflation and favor additional monetary stimulus. But it’s hard for the broader public to be aware that this debate even exists, given that the loudest political voices on monetary policy are those like Gingrich and Romney, who keep insisting (wrongly) that Bernanke is creating unprecedented amounts of inflation.