The curse of Time magazine's Person of the Year Award

Ben Bernanke cannot catch a break at the moment. Just when employment and retail sales were better than expected and the dollar bounced off its lows, he was saddled with Time magazine’s Person of the Year award for 2009. The diligent student of the 1929 Great Depression and Japan's lost decades, he turned on the US printing presses and flooded the economy with dollars to stave off a panic in late 2008 as first class institutions toppled like dominoes around him (witness Fannie Mae, Freddie Mac, Lehman Brothers, Merril Lynch, Citigroup, AIG and General Motors) earning worldwide accolades. Making it to a magazine cover doesn’t seem fair. In case you’ve forgotten, let’s take a look at the last three recipients of Time’s Person of the Year award.

2008:
Barack Obama. How’s he doing? According to one of the most recent polls of U.S. voters:
President Obama’s 45% approval rating has plummeted below where George Bush’s was in 2001.
69% of Americans say they are worried about the increasing role of government in the U.S. economy.
55% of Americans feel the country is on the wrong track.
...and he lost the ultra-safe Democratic seat of Massachusetts held for 50 years, the previous incumbent being Ted Kennedy, one of the US aristocrats. This means his ambitious legislative agenda (healthcare, cap and trade...) is at risk without an absolute party majority in Congress.

2007:
Vladimir Putin won the award two years ago. How’s he doing? Russia has been unable to turn its massive oil reserves into political clout. Putin’s attempt to restore Russian influence over the former Soviet republics has dismally failed. Russia’s relationship with the EU hit new lows as a result of the natural gas wars. Russia’s TV censors cut scenes from an episode of “South Park” that ridiculed Putin.

2006:
Who won the award in 2006? It was "YOU"… remember? Meaning everybody. So, how are you doing?

Over the last weekend, President Obama was ringing up senators before Bernanke's term expires on 31st January, to ensure he achieves the 60 votes required for re-nomination as Fed Chairman for a second term. Before Massachusetts, Bernanke was deemed bullet-proof but a backlash is rippling through the country that he has been too cosy with bailing out the big banks at taxpayers' expense without listening to the needs of small businesses. This is unsettling the senators who are up for re-election this November and could torpedo his renomination...plus riling the financial markets which detest policy uncertainty.

Bernanke will win the re-nomination for a four year term but probably with the highest ever "No" votes cast for re-appointing a Fed Chairman in the Senate this week. The next four years' economic conditions in the US, and indeed around the globe, will truly define the mettle of this man and his place in history. In one corner wieldeth the visible hand of the Fed; in the other standeth Adam Smith's "invisible hand" with the tide of history in its favour. Let the battle begin...