Ben Bernanke has his hands full with QE2 and wrapping up an unprecedented expansion of the Fed's balance sheet. We'll see how that turns out when the buying of treasury notes ends soon and the life support equipment is removed from the U.S. economy. The patient could just keel over when the flip is switched, but more likely than not Ben will be there to flick that switch on and off as needed until the patient can walk out under its own power. The situation is still quite bad with 9% unemployment, but by all accounts we have to give great credit to the Fed and its actions.
The Fed's mandate is to promote maximum sustainable employment and price stability. With deflation in check and a bit of inflation working its way through the system, the Fed has achieved its goals. Given the unprecedented financial crisis (not actually but close enough unless you born in the 1800's), the whole thing could have been much much worse. Ben Bernanke, being a scholar of the Great Depression, has applied his knowledge and walked a tight rope toward salvaging a quite decimated financial system. The biggest question is if price stability can be continued or it will devolve into a deflationary or inflationary hell.
James Bullard, the President and CEO of the St. Louis Fed, had this to say on the origins of the financial crisis. He views the financial crisis as an engineering failure and compares it to asbestos!
I found his perspective interesting and I guess in some ways it was just an engineering failure; I guess until you actually look at what the engineers were thinking at the time—like Goldman Sachs knowing that they were pedaling garbage onto its clients, getting away with it and gladly just paying a fine after it was all said and done, bonuses paid, let's go home style. For a big picture perspective you can see a timeline of events here and a Ben Bernanke speech from December 1, 2008 here.
