uncle Ben!

Sorry, I'm re-reading the story from The Times........

On virtually every topic of significance — how to prevent deflationary panics, for instance, or to gauge the effect of Fed moves on stock-market prices — Bernanke wrote one of the seminal papers. Essays on the Great Depression

Thus the dictum that inflation would lead to jobs was out. According to the new thinking, low inflation is consistent with, and even a prerequisite for, reaching whatever the economy’s potential is.

Bernanke is also firmly opposed to the notion that central banks should raise rates to prick bubbles in the stock market or elsewhere. In a paper written at the height of the dot-com mania, in late 1999, Bernanke and his friend

I do have to say that I strongly disagree with this, if the fed has a mandate to Stimulate the economy, They also have a mandate to rein in Credit Driven Bubbles, be they Stock or Housing. Its a Yin Yang thing, Universal balance must be maintained. An argument can be made that "it's not part of the mandate, but... Just because it's not your job, you have a responsibility to act to stop massive obvious destruction, Rein in a destructive market. whether through direct fed actions or through use of your obvious roll for leadership of the economy. "When you drive a car, and someone makes a mistake and almost hits your car, you do have a moral responsibility to avoid killing them, Regardless of if it is or is not your job."

Overall, I can see that he realizes that he is walking a Razors edge, He knows it too. I don't believe that they were asleep at the wheel, I think they were and are properly worried about inflation.