Move Over, Bernanke

Ben Bernanke is Person of the Year. Matt Yglesias has criticism, although he does say it was an appropriate choice. Now, the Time award is meant to recognize newsworthiness, not necessarily exceptional conduct, and it’s hard to deny that Bernanke has been newsworthy. But I think that 2008 was Bernanke’s year, not 2009–that was the year of the real battle to prevent the collapse of the financial system. As far as the crisis is concerned, I would say the face of 2009 has been Tim Geithner–PPIP, stress tests (largely conducted by the Fed, but Geithner was the front man), Saturday Night Live, regulatory “reform,” and so on. But I can see why Time didn’t want to go there. Besides, I’m not sure that the financial crisis was the story of 2009; what about the recession? They’re related, obviously, but they’re not the same thing.

But in real news, Simon was named Public Intellectual of the Year by Prospect Magazine (UK). (This year they seem to have restricted themselves to financial crisis figures; David Petraeus won in 2008.) Over Ben Bernanke, among others. (Conversely, Simon didn’t make Time‘s list of “25 people who mattered”–but Jon and Kate Gosselin did, so that’s no surprise.) The article says that Simon “has also done more than any academic to popularise his case: writing articles, a must-read blog, and appearing tirelessly on television,” which sounds about right to me.

Prospect got one thing wrong, though. The article has a cartoon of Simon holding a sledgehammer and towering over a Citigroup in ruins. But no matter how many times you keep taking whacks at Citigroup, it refuses to die. One hundred years from now, maybe people will still be saying there are two common ingredients in all U.S. financial crisis: excess borrowing … and Citibank.

Update: I should have made clear that I prefer my award.

By James Kwak

15 thoughts on “Move Over, Bernanke

  1. Thirty years ago I had a free checking account with Citibank. I was a grad student and not prosperous, but I never bounced checks or anything like that. Then I got a letter saying they were cancelling my account. I went in and spoke to the branch manager, thinking that if they no longer wanted to give me free checking, they would be willing to make some other arrangement. No. They were determined to shed me as a customer – no other arrangements were available. My account was just too small for them to bother with. The branch manager had the grace to be embarrassed as she told me this.

    I resolved then to never do business with them if I had any other alternative. So far I have had other alternatives.

  2. Stalin, like Bernanke, was Time “Man of the Year.” Twice.

    Genuine congratulations to Mr. Johnson.

  3. Congrats to Simon, deserved.

    As for Time’s award not necessarily being an accolade but just recognition of great importance, based on the disgusting quotes I saw from the article it looks like this time at least it’s really meant to be hagiography.

    Part of why I stopped reading Time years ago.

  4. “Conversely, Simon didn’t make Time’s list of “25 people who mattered”–but Jon and Kate Gosselin did, so that’s no surprise.”

    Wow…I guess Time really does belong beside all the other gossip magazines at the supermarket.

  5. Congratulations! I agree this is a must-read blog. To the end, James, I wonder if you could give us less technically-savvy readers an explanation of how banks have made so much money this year? There is lots of talk about “trading activities.” I’ve also heard carrying trade mentioned. I get a sense these profits are related to the fact that the Fed is shoveling money to the banks at near 0% interest. But they are not lending that out, so it remains unclear to me how that would generate profits.

    Anyway, a brief primer would be most appreciated! Or if I’ve missed something that you’ve already written someone can point me to that, maybe.

  6. Congrats Simon!

    Hitler was also Time man of the year! After that being said I do think that Bernanke is a fine choice for man of the year because he may be newsworthy but it doesn’t mean it is positive news.

  7. Yes, he is the man of the year, but not, as Simon says, for particularly positive reasons. He is the real engineer behind the escape of the TBTF’s. I say escape, because without an endless, nearly cost free credit line from the Fed, the bigs would not be able to game us with even more derivatives, hedging and driving down the dollar, and continuing to take up GDP that needs to be shared with everyone. Bernanke is actually their lynch pin. If he marginally raised rates, and conditioned access on them doing regular bank business with what they got, AND, removed all of the nefarious guarantees which continue to bullet proof them, then they might just want Glass-Steagall back. Sorry, but Ben the Manipulator has got American (perhaps even a bit unwittingly) right where the TBTF’s want us.

  8. ” As the FT’s Martin Wolf told Prospect: “Johnson’s significance is that he is a member of the establishment—a former IMF chief economist, no less—who has emphasised the capture of the state by big finance, for the latter’s own ends. An expert on crises in emerging countries and in transition from communism, he has called what he has seen: crony capitalism at the heart of the financial system.””

    well done Mr. Johnson.

  9. I agree. Thanks for giving us insight into things few of us have had the means of recognizing.

  10. Bravo on Simon receiving appropriate recognition for his efforts. As a recent follower, I’m still in the process of learning from the comprehensive array of material. The webcast lectures were compelling, along with subsequent interviews and articles. I can only conclude that we’re lucky to have someone of his credentials and determination who articulates his analysis so effectively through different outlets. Thanks James for your ample contribution (love the blog humor), and good luck on the upcoming ’13 Bankers’. My New Year’s wish is for Simon to appear on Charlie Rose to promote the book. Seriously, I’m looking forward to their conversation, and how great it will be.
    Cheers 2010!
    P.S. I hope it wasn’t an insult comparing his parting reply on Rather’s show to Simon Cowell. It was a glib analogy that struck me in the moment of posting on Facebook.

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