A Heckuva Good Flip-Flop

Published: October 5, 2007, 10:55 am

In politics -- especially on the campaign trail -- key issue flip-flops are usually quite damaging. That's not necessarily the case in monetary policy. Fed head Ben Bernanke had a whopper of a flip-flop nearly two months ago. But it was a very positive flip-flop for financial markets, the economy, and maybe even the sinking fortunes of the Republican Party. Earlier this week, Wharton school finance lecturer Ken Thomas shed some light on the Fed chair's flip-flop. Using the Freedom of Information Act, Thomas was able to unearth Bernanke's calendar of phone calls and meetings during the height of this summer's credit seize-up. By piecing together a logical narrative, he discovered that a day after the Fed's August 7th decision to keep rates steady, and maintain their focus on inflation worries, Mr. Bernanke received a phone call from Wall Street powerhouse and former Clinton Treasury Secretary, Citigroup's Robert Rubin. Markets were already in disarray from the credit seize-up that

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