Chairman Bernanke: “We could raise interest rates in 15 minutes if we have to. So there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation at the appropriate time. Now that time is not now.”

Scott Pelley, CBS 60 Minutes: “You have what degree of confidence in your ability to control this?”

“100%.”

* * *

No doubt that exchange of 2010 will go down as the most famous of Mr. Bernanke’s tenure as chairman of the Federal Reserve. It is the context in which to savor — if that is the word — the news of today’s “surprise,” as the headlines labeled the announcement of the Federal Open Market Committee’s decision to keep on pumping. On the one hand the Fed has been signaling it’s getting ready to start ending the regime of quantitative easing by which it has been trying to keep the sluggish economy from falling back into recession. On the other hand every time it wants to start tapering off it discovers it can’t.

What did they used to call it in another context — the jones?

If Mr. Bernanke really is going to leave the chairmanship at the end of his second term — we have our doubts, but we’re a minority of one on the point — he doesn’t have much time to start doing what he once said he was 100% confident he could do. He would insist, of course, that there is no danger of inflation and that the Federal Open Market Committee just wants to make sure of things. Here it is, quoting today’s Fed press release, in the micro-language known as Fedspeak:

“Taking into account the extent of federal fiscal retrenchment, the Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases. Accordingly, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.”

One of the ways one can tell this was a surprise development is that value of the dollar started plunging almost immediately — and dramatically. Before the Fed trans-configured everyone’s expectations, the value of the dollar was something like a 1,300th of an ounce of gold. By the mid-afternoon, it had plunged to but a 1,360th of an ounce of gold. We wouldn’t want to make too much of minute-to-minute fluctuations in the value of the dollar, not in this age of fiat money. But we wouldn’t want to make too little of it either, not in this age of fiat money.

The fact of the matter is that if Mr. Bernanke is nearing the end of his years as chairman of the Fed, he will be leaving his successor a dollar that is of less value than any other Fed chairman has ever left behind him. His defenders are going to spend the next generation trying to credit him with saving the country from another Great Depression. We would not want to suggest that monetary policy is never a tool that can be used in the face of a recession. And we don’t blame Mr. Bernanke, or the Fed, so much as we blame the Congress.

But given the boastfulness with which Mr. Bernanke has advanced his aggressive expansion of his balance sheet, it’s hard to put the today’s action in anything but sharp relief. The derisiveness — the barely concealed contempt — with which Mr. Bernanke has testified before Congress in respect of measures that might have been recommended by, say, Presidents Harding or Coolidge, who so quickly turned around the near depression in which they made their accession to national leadership, well, let’s just say it is off key. It puts a premium on the hearing that will be held in the senate in respect of the next Fed chairman.