Baum: Bernanke the banker - and politician

Caroline Baum, the author of "Just What I Said," writes for Bloomberg News.

He probably wishes he hadn't said it, the part about the Federal Reserve not printing money and his 100 percent confidence in his ability to raise interest rates at the appropriate time to prevent an acceleration of inflation.

But he did. The Fed does (print money). And nothing is 100 percent certain in this world, except death and taxes.

So what on Earth was Ben Bernanke thinking when he talked to Scott Pelley on CBS' "60 Minutes" broadcast Sunday night? It was a different Bernanke than the one who sat down for an interview with the same correspondent for that show on March 15, 2009.

That Bernanke was humble. Viewers responded positively to him. Here was arguably the most powerful man in the world who hadn't forgotten his small-town roots. A creature of neither Wall Street nor Washington, Bernanke inherited a financial system on the verge of collapse and, as he put it, he was forced to bail out Wall Street to save Main Street.

Sunday's Bernanke was different, defensive. He was responding to his critics, both domestic and foreign, who are opposed to the second round of quantitative easing as either unnecessary, a case of overreach or dollar-debasing and therefore inflationary.

In defending himself, Bernanke said some things that left critics and admirers scratching their heads. For example, his contention about money printing: "We're not printing money. The amount of currency in circulation is not changing."

Unlike his predecessor, Alan Greenspan, Bernanke isn't known for his nuanced and obfuscatory statements. So I doubt he was referring to the physical act of printing coinage and notes by the U.S. Mint and U.S. Bureau of Engraving and Printing, which are part of the Treasury Department.

Of course the central bank prints (definition: manufactures or produces out of pixie dust) money. Bernanke invoked that power as a member of the Board of Governors of the Federal Reserve System in 2002, to reassure the public that the Fed has the means to prevent deflation: a "technology known as a printing press that allows it to produce as many U.S. dollars as it wishes at essentially no cost."

But let's compare the Bernanke of March 2009 - working on little sleep and lots of adrenaline to keep the markets functioning and economy afloat - to the Bernanke of December 2010.

Back then, Bernanke conceded that, "It's hard to forecast where we're going." It is hard - in both good times and bad. The uncertainty principle applies to both phases of the business cycle, not just a contracting economy.

Now, asked by Pelley what degree of confidence he had in his ability to act at the appropriate time to prevent inflation from accelerating, Bernanke said, "A hundred percent." Bernanke - who told Pelley he wished he had seen the crisis coming and who told Congress in March 2007 the impact of the subprime crisis was likely to be "contained" - is completely certain his model will alert him when it's time to unwind the stimulus?

Early last year, amid sightings of "green shoots" and a 200-basis-point spike in 10-year Treasury yields, it was all "exit strategy" all the time for the Fed. The shoots turned brown, and Bernanke's exit strategy became a revolving door to get back in.

What's so troubling about the Sunday interview is that it wasn't Bernanke, the media-shy economist, talking. It was a politician attempting to bolster confidence in his constituents and support for his policies. That's not an ideal character trait for a central banker at a time when official interest rates, already close to zero, can only go up. The opposition from Congress to any rate increase will be intense, especially when the Fed will have to embark on its journey to normalize rates well before the unemployment rate falls to an acceptable level.

In the 2009 interview, Bernanke said that the biggest risk was that the United States wouldn't have the "political will" to fight the crisis and would withdraw support for the economy too early.

After Sunday's interview, we no longer have to worry about the Fed's commitment to doing whatever it takes to promote a self-sustaining recovery. The real concern is policy-makers won't know when they've done enough. If history is any guide, we can be almost 100 percent certain that they won't.