Bernanke's Debt Crisis Lecture

"Calamitous circumstance thrust me
Into coping with crisis robustly,
And in daring to bail
The Too Big To Fail,
I rescued your tail, you can trust me."

Federal Reserve Chairman Ben Bernanke, in the third of his four lectures at George Washington University on the Fed and the financial crisis, told his students that the Fed's extraordinary 2008 actions prevented a "total meltdown". Said the Chairman, "I think the view is increasingly gaining acceptance that without the forceful policy response that stabilized the financial system in 2008 and early 2009, we could've had a much worse outcome in the economy." One of Mr. Bernanke's key slides, shown at right, compares the trend of industrial production in the periods beginning in 1929 (blue line) and 2008 (red line); by comparison with the Great Depression, the Chairman tells us, it's clear that things could have gone much worse this time.