So, Ben Bernanke is Time's new Person of the Year. Let's hope it turns out OK.
The last time the august publication honored a national economic mastermind, it was 1933. And things ended badly.
Brig. Gen. Hugh Johnson seemed a good choice at the time. True, he seemed a fan of Mussolini - he distributed the writings of one of the Italian dictator's fascist economists. But he had also helped set up the World War I draft and the Army's war procurement from the private sector. An avid New Dealer anxious to root out destructive competition, he was President Roosevelt's choice to administer the National Recovery Administration.
The NRA was the closest the United States ever came to a government-run peacetime economy. It negotiated codes of "fair competition" for major industries, setting wages and prices, and enforcing them by jailing non-compliers.
But by 1934, the NRA was faltering under the weight and inflexibility of its own rules. Roosevelt ousted General Johnson. A year later, the Supreme Court ruled that the whole scheme was unconstitutional and Johnson became forgotten.
That's what happens to some Persons of the Year. (Anyone remember Harlow Herbert Curtice, GM president and 1955 winner?
And a surprising number of Persons of the Year fail in the years following their anointing by Time: Chiang Kai-Shek (1937), Adolf Hitler (1938), Joseph Stalin (1939 and 1942), Lyndon Johnson (1964 and 1967), Gen. William Westmoreland (1965), Richard Nixon (1971 and cowinner in 1972), and so on.
Certainly, after an admittedly slow start, Mr. Bernanke has done well so far, according to the traditional narrative. In this view, the US was perilously close to a meltdown of the financial system and a second depression when Bernanke, a student of the Depression, stepped in with bold moves. "The story of the year was a weak economy that could have been much, much weaker," Time wrote, introducing its story on Bernanke. "Thank the man who runs the Federal Reserve, our mild-mannered economic overlord."
But even his most ardent supporters will concede that his job is only half over. How he manages the recovery will be as important to his legacy as his moves during the crisis. He must wind down the monetary stimulus without throwing the economy in reverse, keep inflation from heating up and the dollar from collapsing.