David Leonhardt in the NY Times has an article today asking the question the financial blogosphere has been repeating for many many months: "If the Fed missed this bubble, will it see a new one?"
"The fact that Mr. Bernanke and other regulators still have not explained why they failed to recognize the last bubble is the weakest link in the Fed’s push for more power. It raises the question: Why should Congress, or anyone else, have faith that future Fed officials will recognize the next bubble?"
Just this week, Mr. Bernanke went to the annual meeting of academic economists in Atlanta to offer his own history of Fed policy during the bubble. Most of his speech, though, was a spirited defense of the Fed’s interest rate policy, complete with slides and formulas, like (pt - pt*) > 0. Only in the last few minutes did he discuss lax regulation. The solution, he said, was “better and smarter” regulation. He never acknowledged that the Fed simply missed the bubble."
Although the financial blogs I read daily have pounded this point mercilessly for the better part of a year, it's still good to see it voiced in the mainstream press.