Of course, as Bernanke knows, there'll come a day when the Fed has to
Now, to be fair, Mr. Bernanke says he's got it all under control. That the Fed can and will ease off the easy-money pedal at just the right time and at just the right pace. So let's hope he knows what he's talking about---and has the political will to pull it off. The problem for a Fed chair concerned with his reputation is, as James Buchanan and Richard Wagner pointed out in Democracy in Deficit:
The monetary decision maker may realize full well that there are "social" gains to be secured from adopting and holding firm against demand-increasing inflation-generating policies. But these general gains will not be translated into personal rewards that can be enjoyed by the decision maker as a consequence of his policy stance. "Easy money" is also "easy" for the monetary manager; "tight money" is extremely unpleasant for him.