by Calculated Risk on 1/30/2007 04:28:00 PM

"We've never had a decline in housing prices on a nationwide basis. What I think is more likely is that house prices will slow, maybe stabilize ... I don't think it's going to drive the economy too far from its full-employment path, though."
Dr. Bernanke, July 29, 2005

From the AP: Thumbs Up for Bernanke on First Year

The economy tested Federal Reserve Chairman Ben Bernanke during his first year on the job. A sinking housing market and a troubled auto industry threatened to short-circuit economic activity. Gyrating energy prices threatened as well.

By most accounts, the Fed chairman passed.

Although I've disagreed with Bernanke at times, I think he deserves credit so far. I included the above quote as a point of disagreement - I expect we will see housing prices decline on a nationwide basis in 2007.

I'd also argue that Bernanke hasn't been tested yet. From Stephen Roach in late 2005:

"Alan Greenspan faced a stock-market crash two months after he took over in August 1987. Paul Volcker had to cope with a rout in the bond market three months after he became chairman in August 1979. G. William Miller was challenged immediately by a dollar crisis in the spring of 1978. For Arthur Burns, it was the inflation bogie in the early 1970s."

So far Bernanke hasn't faced anything like the challenges of his predecessors, but I do feel a little vindicated for supporting his nomination.