Person of the Year, My Foot! Bernanke "Failed Miserably," Chris Whalen Says

"His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivaled power over our money, our jobs, our savings and our national future," Time's Michael Grunwald writes. "The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world. "

Bernanke was clearly at center of the government's response to the financial crisis and remains "the most important player guiding the world's most important economy," as Grunwald writes. By his own admission, the chairman didn't see the credit crisis of 2008 coming and was too slow to react. Still, all but his most strident critics agree Bernanke helped prevent an even worse outcome, possibly a second Great Depression.

But does Bernanke deserve to be "Person of the Year"?

"Absolutely not," says Christopher Whalen, managing director of Institutional Risk Analytics. "On a personal level I have great sympathy for Chairman Bernanke but he's made such a pig's breakfast of this whole situation."

Unlike those who praise Bernanke for bringing the economy back from the brink of the abyss, Whalen says all he's done is "saved the dealer community" from themselves by overseeing a massive taxpayer-funded bailout of the financial community.

Bernanke "hasn't done anything for the real economy," the analyst says. "The only thing I see is inflation. For the average American the message they should take away from this year is this: Bernanke's policy has ensured we'll see the purchasing power of Americans' savings dwindle."

A former staffer at the New York Fed, Whalen also says Bernanke "failed miserably" in maintaining the Fed's independence from both the banks and from politics.

Rather than merely lending money to the Treasury, Bernanke put the Fed directly in the middle of the 2008 bailouts - most notably of AIG, Whalen recalls.

"By taking the lead [Bernanke] undermined the Fed's independence," he says. "He really intervened not so much in the financial markets but in American politics. He gave Bush and Paulson a pass -- they didn't have to take responsibility for the crisis and they hand[ed] the ball to Barack Obama."

It is for these reasons, Whalen says, that Bernanke's reconfirmation by Congress is not assured, and politicians on both sides of the aisle are looking to reign in the Fed's power. It's ironic Bernanke is being lauded in the mainstream press at a time when he -- and the institution he leads -- are under so much pressure in Washington.