This seems like a wise decision, though perhaps not what Obama had in mind last winter. Proposing Larry Summers, the obvious alternative, eminently qualified though he may be, would have antagonized a lot of Democrats even more than reappointing a moderate Republican. Also, since the Fed has faithfully executed so much of the administration's response to the crisis, ditching Bernanke would have looked as though Obama was repudiating his own policies. On the whole I think the Fed chairman has done well in terrible circumstances, and deserves a lot of credit. He cannot be accused of timid passivity, at any rate. Whether he will enjoy presiding over the difficult task of unwinding the Fed's unprecedented interventions, we will find out.

An interesting choice of words in Obama's announcement:

Almost none of the decisions he or any of us made have been easy. The actions we have taken to stabilize our financial system, repair our credit markets, restructure our auto industry, and pass a recovery package have all been steps of necessity, not choice.

"Necessity, not choice." Of course this is his favorite phrase in defending America's engagement in Afghanistan, contrasting that action with the war in Iraq. Robert Kagan had what I thought was a persuasive column on this over the weekend, arguing that what is necessary is rarely clear-cut. The same goes for the management of economic crises. Right or wrong, Obama's economic policies are no more popular than his policy on Afghanistan; but rather than defending them on their merits, he says, "We had no choice." It's not very convincing. Nearly always, there are choices.


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