The debate over who should succeed Ben S. Bernanke, the chairman of the Federal Reserve, has been exceptionally personality-driven. Supporters and opponents of the two leading contenders — Lawrence H. Summers, a former Treasury secretary and adviser to President Obama, and Janet L. Yellen, a Clinton administration veteran like Mr. Summers, and now the Fed’s vice chairwoman — have been feuding in public. Mr. Obama has called the decision, which is expected soon, one of the most important of his presidency.
What all sides seem to misunderstand, however, is the proper nature of the central bank’s role in the economy. Instead of casting about for a new maestro, we need to return the Fed to dullness and its chairman to obscurity.
The Fed has become anything but boring. Under Mr. Bernanke and his predecessor, Alan Greenspan, it didn’t foresee the housing bubble, much less try to pop it. Even if the Fed could identify bubbles, Mr. Bernanke once said, “monetary policy is too blunt a tool for effective use against them.”
Yet for more than four years, the Fed has used this blunt instrument on an unprecedented scale. It is currently buying $85 billion in Treasury and mortgage-backed securities every month, the third round of a strategy, known as quantitative easing, that aims to stimulate the economy by keeping interest rates low.
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