This is the Cato Daily Podcast for Thursday, July 9, 2009.

I'm Caleb Brown.

The Federal Reserve is more controversial than ever.

Ben Bernanke and Alan Greenspan's reputations are clearly implicated in the financial crisis and are sharp and prolonged recession.

The failures of central bankers may offer a rare chance to roll back the powers of the Fed.

So says Mark Calabria, director of financial regulation studies at the Cato Institute.

What was your general impression of Bernanke's recent defense of his own record on Capitol Hill.

I think it was a mixed bag.

And on the plus side, you know, the House Oversight Committee did not find any smoking gun.

You know, they weren't able to say, you know, he or he pressured B of A and to buy and Merle.

They were highly suggestive, but, you know, he needed to do more than that and he didn't he really needed to sort of knock it out of the ballpark and he did not so I think he did not come away

Convincing anybody that you know he did a great job unless they already did that we believed in that

anyhow but there seemed to be nobody who believed that to begin with I mean there

was hostility if in skepticism across the aisle and across the committee on his recent

appearance so it's pretty clear to me that he seems to have very few friends and

supporters or at least those who are openly willing to be his friend and

supporter in capital hell.

In the financial system, when things are going well, isn't the Fed Chairman always a genius

and when things are going poorly, the Fed Chairman is just the guy who didn't foresee this and somehow this is all his fault?

Well, yes and no.

I mean, you can go back and say the thing that really made Greenspan, for instance,

was during the 1987 stock market, you know, that day when the stock market dropped a lot and he, you know, injected liquidity and whether he made the right decision or not, the markets recovered then.

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