Chart du jour, Bernanke's record on inflation edition The great chart above comes via Mark Perry of AEI. Ben Bernanke has a shot at finishing his term with the lowest inflation of any post-war Fed chairman on record by PCE (the Fed's preferred measure). Only William McChesney Martin is even close. The cognitive dissonance will surely overwhelm the goldbugs and inflationistas, and after years of unrelenting jackassery they'll anoint Bernanke as their patron saint... Well, maybe not. But to comment from the opposite direction, Bernanke's record on inflation is nothing to cheer about. The gap between full employment and economic reality has been staggeringly big throughout most of his tenure. Higher broad-based inflation throughout this time would have been extremely helpful - further eroding the household debt overhang; stemming fears of a deflationary episode before they became pervasive; and keeping longer-term inflation expectations elevated so that 1) corporates and businesses, especially those relying on debt to fund payrolls and capital purchases, would feel comfortable investing, and 2) those households who retained income sources and collateral through the early part of the recession would continue to feel comfortable spending. The FOMC took some meaningful steps in the direction of greater inflation tolerance in 2012, which we applauded and for which it deserves credit. But if the committee appeared bold for having adopted an Evans Rule on rates policy with 2.5 per cent PCE as its inflation threshold, it should appear less so when considering that Greenspan averaged 2.5 per cent inflation across the eighteen years of his term. So Bernanke will finish his term with a record of historically low inflation, and measures of unemployment and underemployment still tragically high. Maybe that couldn't have been avoided, but we still wish he had tried a little harder.