Leonhardt's douchery knows no bounds. The Fed can only do so much and it has done quite a lot since the beginning of this crisis. Many are saying the Fed has done enough or too much. So how has Ben Bernanke "been unwilling to use his power to lift growth and reduce joblessness from near a 27-year high?" Wait, isn't that Obama's job? Actually I am just kidding here, but making a point because if a Republican were in the White House, that is who he would be bashing. But back to the point, what does he expect the Fed to do? It has already lowered interest rates to near zero and flooded the market with liquidity. What, is Ben supposed to declare an acceptable unemployment rate and somehow pull a rabbit out of a hat to make it get there overnight? Economic cycles take some time and they will eventually be fixed on their own, even without the Fed's help. The Fed can only quicken its pace, but there there is no free lunch as there are side effects. So to answer your rhetorical question, the greater risk is doing too much!
As is common among journalists, they write articles about topics that they are not really qualified for. Leonhardt is no exception because he is not an economist and obviously doesn't understand what the Federal Reserve does.
Also, he mentions,
In effect, Mr. Bernanke and his colleagues have decided to accept an all-but-certain downside — high unemployment, for years to come — rather than risk an even worse situation — a market panic, a spike in long-term interest rates and yet higher unemployment.
Even by your own statement, isn't that the prudent way to play it? Would you prefer he gamble with the economy and lead to the latter, worse situation?
And like usual, he contradicts himself:
If Mr. Bernanke and his colleagues decided to take further action, their most likely move would be to bring down long-term rates. They could do so by buying the bonds that backed longer-term loans.and then a few paragraphs down he says,
The Fed, meanwhile, has to show it has a strategy for selling the trillions of dollars of assets it bought during the crisis — without damaging the value of private investors’ holdings and without, at some point, igniting inflation. “The more we buy,” Donald Kohn, the Fed’s vice chairman said last month, “the more assets we will ultimately need to dispose of.” The more the Fed buys, the greater the risk that it will find the point at which the market becomes unnerved.By your own admission it is risky for the Fed to 'do more.' Which by the way, the Fed only has a limited ability to influence long-term interest rates.
Do us all a favor and stop writing columns, please.