Larry Meyer of Macroeconomic Advisers is a smart guy and, as a former Federal Reserve Governor, is one of the more looked to voices for opinions about Fed policy moves and appointments.  He believes that Obama has essentially fired Ben Bernanke and that the president wasn't kind about it.

"This is really remarkable," said Meyer. "I almost fell off my chair when I heard the President's remarks last night. He basically fired Ben Bernanke on the spot, and gave a fairly tepid testimonial afterward."

I can't actually imagine that Obama has been displeased with Bernanke.  I think that the President's choice of words, however, was too tepid and merely reflects Obama's now well documented disinterest in the egos of those who serve in appointed or elected office.  Obama said:

"Well, I think Ben Bernanke's done an outstanding job. Ben Bernanke's a little bit like Bob Mueller, the head of the FBI - where he's already stayed a lot longer than he wanted or he was supposed to."

To people who spend more time watching Obama than the Fed, that kind of talk shouldn't be so surprising.  Obama doesn't specialize in effusive.  In this case, he should have made an exception.  For all of the legitimate complaints that people can levy about the financial crisis and the recovery that followed it -- Ben Bernanke saved the world.  Had he more willing partners in Congress, he could have done a lot more and the recovery would have been better for it.

The first complaint against Bernanke is that he failed to see the housing bubble and, in fact, dismissed it.  He made a bad call.  Though it is unclear to me, had he seen the future, what he should have done about it.  Defeating housing inflation would have been more difficult than breaking the general inflation that Paul Volcker faced in the 80s (more on Volcker in a bit) as it would have required precise surgery in order to issue a soft landing.  A lot of Bernanke's critics on this score just wanted to face the pain sooner.  Cut off from debt financing, home prices still would have collapsed and a recession and financial crisis would have been the result.

Once the financial crisis happened, Bernanke rather boldly increased the power of the Federal Reserve in ways that will impact policy for the next century.  It brought the Wall Street banks under its umbrella, offering them protection in exchange for their being regulated.  That's a big deal.  The regulation could be better, for sure.  But it's a start.  Despite the imposition of a strong Volcker rule most of the big banks, now organized as bank holding companies, did get rid of trading desks and whole speculative divisions.  Bernanke did not solve Too Big Too Fail, but he has created an environment where future Fed chairs will be able to act more boldly it a giant teeters.

Bernanke is not so heterodox that he has allowed the Fed to provide financing through any means other than the banking system and this has served to bolster assets prices while not doing much to help you and me.  He has bought the banks time to heal themselves.  He gave them a very easy way to make money by paying them to keep deposits at the Fed (giving them an incentive to keep cash at the ready for emergencies and shocks) and also by giving them a risk free carry trade between a near zero federal funds rate and the yield of the 10-year Treasury.

Some of Bernanke's critics, including me, believe that the Fed should have given aid directly to citizens.  Write up some $10,000 checks and give them to people.  Under the Fed's charter, this is allowed, but mostly by omission (nothing prevents it and the Fed can technically lend or give money to any institution or individual the Governors deem appropriate).  But, Bernanke saw the issue of direct stimulus as an area for Congress and the President to deal with.  That's prudent judgment.  Additionally, Bernanke begged and begged for the government to stop hampering the recovery by forcing municipal and state government job cuts, by imposing austerity or by not supporting a large and bold enough stimulus.  He has also since spoken about the negative effects of extreme income inequality in our economy as well as the role of luck in the accumulation of wealth.  In short, if people would listen to the guy, we'd be much better off.

Perhaps that is a failing.  People listened to Alan Greenspan and that's a great gift for a public figure.  Of course, Greenspan spun a story that people wanted to hear.  He sold a Libertarian fantasy of how the economy worked.  It didn't turn out.  Volcker also has great stature but I suspect that this is because people have forgotten the pain he put the country through in his inflation fight.  Double digit interest rates led to temporarily very high unemployment and a lot of those jobs, particularly in manufacturing and autos, never came back.  The consequences of that are still being felt today.  The Volcker of the Reagan years would not have been the right guy for the Post-Crisis years.  Yes, he would have been tougher on the banks.  But would he have had the courage that Bernanke did in keeping rates so low for so long?  I kind of doubt it because zero rates, particularly for extended periods are not part of the Volcker mentality.  They are part of Bernanke's intellectual heritage.  This is what Bernanke said Japan should have been doing all along.  Bernanke believes in what he's doing.

Barry Ritholtz, no rabid Bernanke defender, reminds that recoveries from a financial crisis tend to be tepid and to take a decade.  Maybe it doesn't have to be that way but my view of Bernanke is that he's done a decent job and, more importantly, has empowered the Fed to do more next time by expanding (not as much as I'd like) the public's perception of what the Fed can do.  By all means, replace him in 2014.  Bernanke has completed his mission.  I think it would be unfair to send him off as a failure.