From Bubble Meter comes the explanation of Ben Bernanke's nickname:
Federal Reserve chairman Ben Bernanke is known by the derogatory nickname 'Helicopter Ben.' The nickname comes from a speech he gave in 2002, in which he referenced Milton Friedman's metaphor of a helicopter dropping money on a community as a way to rescue the economy.
Bubble Meter then waxes poetic:
Real estate was
The way to get rich.
Just buy a home
And give it a flip.
If you bought more house
Than you can afford,
Will dump cash your door.
He's Helicopter, Helicopter,
The money-throwing man
Who works at the Fed.
Money from the clouds,
Money from the sky,
Manna from heaven,
Thank that helicopter guy.
Everybody loves Ben, including Prez Zero, who just re-appointed Bernanke for his second term as head of the Fed. "As an expert on the causes of the Great Depression, I’m sure Ben never imagined that he would be part of a team responsible for preventing another." Russell Roberts from Cafe Hayek considers the effect of government bailouts:
Yes, we have avoided a depression. But let us count the costs.
Financial firms that made irresponsible and imprudent decisions have been rescued, propped up and bailed out.
AIG has received about $180 billion. That is almost $2,000 for every American household. That money has gone to sustain the bonuses of AIG and the financial health of its counterparties, such as Goldman Sachs. This is an obscene travesty.
The Fed currently holds $600 billion worth of Fannie, Freddie and Ginnie mortgage-backed securities. I am not optimistic about how that will turn out.
The Fed has injected hundreds of billions of reserves into member banks. This will fuel future inflation unless Bernanke is willing to raise interest rates when the recovery begins. There will be tremendous political pressure on him not to do so. So inflation is likely to come along with any recovery.
Worst of all, Bernanke, Paulson and Timothy Geithner have continued the disastrous policy of sustaining bondholders and creditors of reckless financial institutions. Capitalism is a profit-and-loss system. The profits encourage risk-taking. The losses encourage prudence. The bondholders and creditors are the single most important check on imprudence. They care only about one thing: solvency. By making them whole, their incentive to restrain recklessness has been greatly weakened. This sows the seeds of the next financial crisis.
I feel sorry for Bernanke. In one sense, as the world's greatest living authority on the Great Depression, he is the best man for the job. But because he is the world's greatest living authority on the Great Depression, another catastrophic economic debacle of a similar magnitude would be particularly embarrassing were it to occur on his watch. I believe he has gone too far in the other direction.
So perhaps Bernanke can explain why he supported appointment of Denis Hughes, president of the New York state branch of the AFL-CIO, as the new Chairman of the New York Federal Reserve Bank. Hughes has never worked in banking.