After helping to avert worldwide financial catastrophe and staving off a full-blown depression, Federal Reserve Chairman Ben Bernanke has been named Time Magazine’s 2009 Person of the Year.

“History is composed not only of what happened but of what didn’t happen …. We do know what happened to the U.S. and world economies during the past year, and it wasn’t pretty,” Time Managing Editor Richard Stengel writes in explaining the choice of the Fed chairman, titled “The Good Banker.”  “What we don’t know is what the economy and our lives would look like if a few individuals had not acted on our behalf and had simply sat on their hands ….. We don’t know what didn’t happen, but I’m convinced that the economy would look much, much worse. “

Since the economy worsened late in 2008, Bernanke has wielded an enormous amount of power; pouring trillions into the financial industry; orchestrating massive bailouts of some banks while letting others fail; pushing interest rates to historically low levels; and expanding the central bank’s balance sheet by trillions.

Time calls Bernanke “the most powerful nerd on the planet” and the man responsible for “the most important and least understood force shaping the American — and global — economy.”

The moves that Bernanke has made during his tenure have been unprecedented, but many have also credited those moves with saving the U.S. economy from absolute disaster.  After using taxpayer dollars to bailout some of the nation’s biggest banks, Bernanke orchestrated JPMorgan Chase’s purchase of Bear Stearns – an historic intervention into the free market for the Fed.

Since the start of 2008, the Fed’s balance sheet has ballooned to $2.2 trillion – a 132 percent increase due to increased lending.

A student of history, Bernanke studied The Great Depression, and, according to Time, is responsible for helping the U.S. avoid a 2.0 version by learning from it.
   
“Bernanke didn’t just learn from history; he wrote it himself and was damned if he was going to repeat it,” Stengel writes.  “Bernanke decided to do the opposite of what the Fed did back in the ’30s: he would loosen the money supply as far as it would go, he would save as many banks as he could, and he wasn’t going to hector the American public about pulling up their socks.”

Bernanke, however, has not been immune to criticism.  Many economists and lawmakers blame Bernanke for failing to prevent the housing bubble that started the crisis.  Others say that he is favoring Wall Street over average citizens in trying to stabilize the economy.   
But, there is little arguing that Bernanke is currently one of the world’s most powerful men by virtue of his position and the circumstances.

He is, according to Time, “the most important player guiding the world’s most important economy. His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivaled power over our money, our jobs, our savings and our national future. The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world.”

Bernanke was chosen over finalists Usain Bolt, Olympic gold medal winner and world’s fastest man; House Speaker Nancy Pelosi (D-CA); General Stanley McChrystal, chief architect of the Afghanistan surge; and the Chinese worker, who has pushed China to become the world’s fastest growing economy.

Time has given out its Person of the Year award since 1927 when aviator Charles Lindbergh won the honor after performing the first sol trans-Atlantic flight.  Other previous winners include President Barack Obama, former British Prime Minister Winston Churchill and former U.S. Presidents Franklin D. Roosevelt, John F. Kennedy, Ronald Reagan, George W. Bush and Bill Clinton.

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