I have David Wessel's book In Fed We Trust: Ben Bernanke's War on the Great Panic and it's good reading. The story about the panic is pretty well known now and was even dramatized in HBO's Too Big To Fail. On the back of In Fed We Trust are blurbs by Joseph Stiglitz, Thomas Ricks, N. Gregory Mankiw and Ron Suskind.

I went to the local Barnes and Noble to skim Suskind's new book Confidence Men and it was better than the impression I got from the reviews. He does seem to make some fundamental mistakes and has an antipathy towards Summers, but apparently Summers was behind a bigger stimulus and a Swedish type solution and he wanted to be Fed Chair. Obama wanted stability and to stay the course but perhaps it was a mistake. Certainly Summers would be under even more fire now than Bernanke but maybe Summers would have done more as Fed Chair. Anyway Suskind seemed to want better economic policy than we got and his heart was in the right place even though his various critics may be right, probably are right. Suskind would endorse OWS I imagine.

I searched the pages listed in the index for Bernanke and according to Suskind Obama never really talked to him.  Apparently Bernanke was tacitly backing Geithner in most things, but otherwise he's in the background. Maybe to maintain independence?

Via Delong, David Wessel on What the Fed Might Do:

Wessel: The Fed is not out of ammo, the economists at the Bank Credit Analyst insist, but….

There are three potential ‘nuclear options’ at the Fed’s disposal that could have a major impact on economy activity,

writes Peter Berezin, managing editor of the Montreal-based monthly report.

Unfortunately, all three options would be hard to implement and carry significant risks.

The three:

• Target a higher inflation rate or pre-specified level for the consumer price index or nominal gross domestic product. Problem: “could undermine the Fed’s long-standing commitment to price stability.”
• Stimulate bank lending by putting a tax on excess reserves, hoping that banks will the lend out the money if the have to pay borrowers to take the loans. Problem: “could lead to the collapse of money market funds and the disintermediation of the financial system.”
• Buy corporate debt, equities, real estate or foreign currency. Problem: Could require an act of Congress. “Given that the U.S. economy remains stuck in a liquidity trap,” Berezin concludes, “fiscal policy would be the most straightforward way to stimulate….However, the likelihood that the U.S. will receive major fiscal stimulus anytime soon is close to zero.”

His bottom line: “The recovery remains subpar” and the stock market “characterized more by volatility than a clear upward trend.”

Says DeLong: "I see no risks in attempting any of these three--and great risks in continuing to dither"