Ben Bernanke is serving his last week as the Chair of the Federal Reserve and will be replaced by Janet Yellen on February 1st, which makes this a good time to consider his track record.

I agree with Kevin Grier (aka Angus), who praises Bernanke for avoiding both financial catastrophe and inflation.  Ben considers the monetary authority to be limited in its ability to manage the macroeconomy.  He sees the Fed's power as limited to two functions:

1. Controlling inflation
2. Providing ample money in times of crisis

The data shows that Bernanke was successful in both endeavors. 

First, inflation averaged just 2.2% during Bernanke's tenure (see figure below), lower than any of his predecessors since the 1970s.  Ben is probably not unhappy with this result. 

Second, Bernanke made sure there was plenty of liquidity in markets during the darkest days of the Great Recession and the recovery, even when this involved creating a new tool (quantitative easing) and figuring out how to use it, all without causing inflation.  Tough job.

The third (and final) GDP estimate for the third quarter revised growth up yet again, this time to 4.1%.  This figure indicates that growth was stronger in the third quarter than at any time since the end of 2011. The graph below shows quarterly growth rates since 2003.

Notice that 4.1% is larger than all but one quarter since before the Great Recession.  These are the kinds of growth rates we need if the economy is to truly recover from the Great Recession.  Finally, the revisions indicate that more of the growth came from consumption than previously thought.  The table below shows how each of the four categories of GDP spending contributed to overall growth.

The takeaway:

1. GDP growth in the third quarter was higher than all but one quarter since 2006.
2. The new data shows greater growth in consumption.

Japan is simultaneously implementing both expansionary and contractionary fiscal policy.  According to The Wall Street Journal, the massive government debt has necessitated an increase in the national sales tax:

Prime Minister Shinzo Abe took a long-awaited decision to raise Japan's sales tax by 3 percentage points (LC: up to 8% total), placing the need to cut the nation's towering debt ahead of any risk to recent economic growth...

In order to offset this increase in taxes, Abe also promised an additional fiscal stimulus:

The stimulus measures total around ¥5 trillion ($51 billion), including cash-handouts to low-income families, Mr. Abe said. On top of that, there will be tax breaks valued at ¥1 trillion for companies making capital investments and wage increases.

Both of these policies are focused firmly on aggregate demand. 

One of my pet peeves is the myopic view that our most recent recession (the Great Recession) is comparable to the contractions of the 1930s (the Great Depression).  Photographs from the Depression era are very helpful in dispelling this misconception. 

Today's Mail Online published a series of poignant Walker Evans photos from the 1930s, which illustrate the extent to which life in the Depression era was completely different from life in the past five years.

I know the Great Recession was difficult for many and that long-term unemployment remains stubbornly high.  But let's not equate it to the Great Depression.  After all, according to this website, nearly 500 new Starbucks locations opened in the United States during the worst part of the Great Recession (between 2007 and 2009).