As Ben Bernanke, the outgoing chairman of the Federal Reserve, must recognize, he is the victim of the law of diminishing returns. In the initial days of the 2008-09 financial crisis, he mobilized the Fed as the lender of last resort. This helped quell an intensifying financial panic and, arguably, averted a second Great Depression. Bernanke's role has been much praised and deserves the nation's gratitude. It is doubtful anyone else would have done better.
But Bernanke's ambition transcended calamity prevention. He sought to kick-start the economy by keeping short-term interest rates low (effectively zero since late 2008) and by massive bond-buying (called "quantitative easing").
The strategy was to reduce long-term interest rates, strengthen a housing revival, boost stock prices and stimulate corporate investment in plants and equipment. Here, his success is scant. Since mid-2009, the economy has grown at an anemic annual rate of 2.4 percent. Payroll jobs are still 1.2 million below their 2007 peak, and 7 million Americans have left the labor force — some retired but perhaps half, by some estimates, quit out of discouragement of finding work.