More than 100 million investors should thank Ben Bernanke for preventing a cataclysmic meltdown of financial markets. They should be consoled that the chairman of the central bank, aided and abetted by others like the secretary of Treasury, made sure a second Great Depression did not wrack this nation and the world. They should be aware that Mr. Bernanke is a close student of the Great Depression and knew not to make the same blunders as his predecessors by stifling the money supply, and even raising interest rates in the early stages of the 1930s crisis–which snuffed out a rebound in the economy. – Forbes

Dominant Social Theme: Understanding Ben.

Free-Market Analysis: We are not in the mood to thank Ben Bernanke. Nor are we especially grateful for central banks. The concept of central banking is under attack as it never has been for years. And Bernanke himself has come under sustained attack as well. But perhaps the article, which is really an opinion piece, can be better explained by understanding the author, Robert Lenzner. Here is an Internet bio:

Robert Lenzner is National Editor of Forbes magazine. He joined Forbes as a Senior Editor in September 1992. His areas of expertise include Wall Street, investment banking, finance, the oil industry, corporate takeovers, insider trading and litigation. Prior to joining Forbes, Mr. Lenzner was a Columnist for the Boston Globe and the Dallas Morning News from 1990 to 1992. He was New York Correspondent for the Boston Globe from 1971 to 1982 and their New York Bureau Chief from 1983 to 1990. He was also a Correspondent for The Economist from 1973 to 1992. From 1969 to 1970 Mr. Lenzner was Manager of the Arbitrage Department at Oppenheimer & Co., and he was assistant to the partner in charge of trading and arbitrage at Goldman Sachs & Co. from 1962 to 1968. … He is the author of The Great Getty, a biography of J. Paul Getty, which spent 13 weeks on the New York Times bestseller list, rising to number three. His articles have also appeared in Barron's, Vanity Fair, the (London) Financial Times, the New York Observer and the Rocky Mountain News, among others. Mr. Lenzner has a B.A. (cum laude) from Harvard University and an M.B.A. from Columbia University. He also attended Oxford University from 1957 to 1958.

It is a very mainstream bio and obviously a lengthy one. Lenzner writes for mainstream papers and is a senior editor at a mainstream publication. Yet no matter what Lenzner writes, central banking is still flawed. The main difficulty with central banks is that they set the price of money. Price fixing, as almost anyone knows, doesn't work. It leads inevitably to inefficiencies, rationing and queues. We can see this pattern when it comes to money. First there is too much of it, then too little. And people line up in droves seeking loans from banks these days that they will never receive. Here's some more from the article on why Bernanke has done such a good job:

Mr. Bernanke is a close student of the Great Depression and knew not to make the same blunders as his predecessors by stifling the money supply, and even raising interest rates in the early stages of the 1930s crisis–which snuffed out a rebound in the economy. Investors should thank Bernanke for setting the stage for a 40% rebound in the Dow Jones industrial average from its low. As well as a nearly 30% gain in the Standard & Poor's 500 index. The stock averages did not lose 90% of their value as they did from 1929-32. That was the Great Crash. Bernanke has presided over the "great recession," which hopefully is coming to an end. He should not be blamed for the errors made by his predecessor, Alan Greenspan, or for the inability of Tim Geithner as president of the New York Federal Reserve Bank to reduce the mad leverage used by major banks–especially in combination with murky off-balance sheet vehicles stuffed with toxic junk like mortgage-backed securities.

Let's be fair. We are not fans of Bernanke, but in fact, there is in fact no reason to blame just him. It is the system itself that is flawed. It is the system itself that must be reformed. Now you may be an investor who is heartened by the recent rise of the Dow – even bearing in mind that it has suffered a nearly 50 percent loss in the past two years. But we are not comforted by the vagaries of the modern economic climate. Its depressions and recessions, interest rate spikes and endless inflation. Lenzner is. Here's how he ends his article:

In short, take heart, the government debt and prodigious credit creation that saved Wall Street will not suffocate the economy with inflation. Rather, it was the economy's salvation. Let's keep Ben on the job.

Lenzner may believe that government dept and prodigious credit creation saved Wall Street, but we will continue to think that these same factors basically ruined both Wall Street and Main Street – not once but over and over. The central banking era has not proven either kind or effective and no human being is wise enough or far-seeing enough to set the price of money. A gold and silver market standard that allows the invisible hand to set the price of money would be far preferable. Lenzner, for all his prestigious background and education apparently cannot see that. We won't hold our breath.