Like any experienced Fed chairman, Ben Bernanke knows how to choose his words carefully. So the triumphalist headline, “How the Fed Saved the Economy,” assigned to his Oct. 4 Wall Street Journal column, probably wasn’t his doing. Still the question remains: did the Fed really save us? Bernanke suggests that it did. But the evidence he musters leaves plenty of room for doubt.

At 5.1 percent, Bernanke observes, the unemployment rate is “close to normal.” One needn’t delve into the statistic to doubt that a return to “close to normal” unemployment after six long years is much of an achievement. But delving in makes the achievement more doubtful still.
As Bernanke himself admits, “other indicators,” including the labor force participation rate, suggest “that there is some distance left to go.” That’s putting things mildly: in fact, two-thirds of the decline in unemployment since 2009 is due, not to the unemployed finding jobs, but to their giving up. Bernanke presumably doesn’t want us to thank the Fed for that.
The inflation rate, Bernanke informs us, is just 1.5 percent—somewhat below the Fed’s 2 percent target, and nowhere near the hyperinflation some histrionic Fed critics warned against. But histrionics notwithstanding, the statistic is, once again, more proof of the Fed’s failure than of its success: as everyone who has followed the Fed’s efforts knows, inflation is low, not because the Fed has taken pains to keep it there, but despite the Fed’s attempts, through several massive rounds of quantitative easing, to raise it.