Barack Obama has rendered one of his most important post-crisis verdicts: Ben Bernanke will be nominated for a second term as chair of the Federal Reserve. This is a very short-sighted decision. While America's head central banker deserves credit for being creative and courageous in orchestrating an unusually aggressive monetary easing, it is important to remember that his pre-crisis actions played an equally critical role in setting the stage for the most wrenching recession since the 1930s. It is as if a doctor guilty of malpractice is being given credit for inventing a miracle cure. Maybe the patient needs a new doctor.

Mr Bernanke made three critical mistakes in his pre-Lehman incarnation: First, and foremost, he was deeply wedded to the philosophical conviction that central banks should be agnostic when it comes to asset bubbles. On this count, he stood