Ben Bernanke, the retiring Chairman of the Federal Reserve Board in the U.S., did his best to fight the notion that he was preconditioned to be “dovish.”  This might have been an attempt to challenge the nickname of “Helicopter Ben” given to him after a speech in November 2002 where he suggested that if the U.S. faced deflation, the Fed could always resort to dropping money from helicopters.

To give him credit, Bernanke held back temptations to excessively expand the money supply at the beginning of his appointment.  In fact, he was known for downplaying growing concerns rather than automatically responding by increasing liquidity. During this phase he famously said that the Subprime mortgage crisis was “contained, suggesting that we should worry about (Although the Fed’s inability to forecast the crisis was also a contributing factor to his initial reaction).

Finally, when the Global Credit Crisis and the Great Recession hit, Bernanke caved in and has never looked back, reaffirming the reasons as to why the name “Helicopter Ben” fit him so well.

Just as Bernanke was given some benefit of the doubt, Janet Yellen is getting some similar treatment from many investors in the market.  Honeymoons tend to be like that.  However, when people face pressure, they mostly revert back to old habits and beliefs.

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Editor’s Note: In recent weeks, Jay Nordlinger sat down with János Horváth, a distinguished Hungarian: a fighter against the Nazis, and a prisoner of them; a fighter against the Communists, and a prisoner of them; a leader of the 1956 revolution; an economist and free-marketeer; an exile in the United States for more than 40 years; now the oldest member of the Hungarian parliament, as he was the youngest after World War II. The preceding parts of this interview series are at the following links: I, II, and III. The series concludes today.

You will recall that we were talking about President Obama. I had asked Horváth about him — “What is he?” — and he replied, “I think he is a curious man trying to understand himself. I’m a man of good will, and I like to think that he, too, is a man of good will. But he is stumbling, and he is doing certain things in areas that he doesn’t know enough about.”

Then I ask Horváth, “Do you think he’s a victim, in a sense, of a left-wing education” (the kind of education many of us had)? I’m thinking of what he learned about economics. I’m also thinking of what he learned about the Middle East. Frankly, I’m thinking of what he learned about nearly everything.

Horváth says, “Yes, probably.” He goes on to say something playful, but serious. “When you’re a surgeon or a pilot, you have to be precise. You have to know what you’re doing. But the realm of law or politics is much different. In these fields, the performance indicators are looser,” to put it mildly. There is “a more roundabout complexity.”

He further says he can understand the happiness America felt when it elected a black president. He remembers the happiness people felt when they elected a Catholic president in 1960. And so it will be with a woman president, a Hispanic president, a Jewish president (maybe), an Asian president . . . “America feels she lives up to her own image in this process.”

Well, what does Horváth think of America’s new health law, “Obamacare”? He says that politics and economics are in conflict. Political needs or desires have won out over sound economics.

“There are several ways to do health care well,” he says. You can have private enterprise, which is best. Or you can have “the social medicine of Sweden or Canada.” Even this is better than what the U.S. currently has, says Horváth. He says we spend a great deal on health care and get outcomes not much better, if better at all, than those of countries that spend a lot less.

“A country that prides itself on economic success should not be doing this badly,” says Horváth. “If I were an American prophet, I would stand on every street corner and say, ‘We ought to spread ashes on our heads. We should be ashamed at what is happening to us.’ One could understand how it happened to the stupid Soviet Union. But for the U.S. to go bankrupt?”

Horváth hastens to say that the U.S. is not bankrupt. Still, we are in a terrible predicament.

I like to ask people who love America — foreigners who love America — “Tell us our faults. What’s wrong with America? I know you love the place, but friends can point out friends’ faults.”

Like everybody else (in my experience), Horváth hesitates. Then he says, “Americans should know better the assets they have. I’m not talking about petroleum or gold or whatever. I’m talking about institutions. In all of world history, the American institutional framework is the best that has ever been. Representative government. You can elect someone, reelect someone, and unelect someone. It is very rare in the world to unelect someone.

“This is being done in a humane, civilized fashion. We don’t go around hitting or kicking or murdering one another. The mechanism works.”

…..read page 2 HERE