In terms of influence over the next President, the Supreme Court pales in comparison to Ben Bernanke. Only Europe will have more influence than the bald, mild-mannered, and lightly-bearded Chairman of the Federal Reserve. With Congress dithering away their time lobbying softball questions at Jamie Dimon, the Fed is the only institution acting to save the recovery. Should Europe collapse, Bernanke stands alone between us and the abyss, and analyzing Bernanke’s every move has become a fevered science on Wall Street.

But weeks of speculation capped off Thursday in a disappointing decision that evoked neither excitement nor terror in the markets. Unable to commit, or ensure the success, of more aggressive action, Bernanke offered only a modest stimulus package to jolt demand. Codenamed Operation Twist—nice attempt to make financial policy more exciting, Ben—the effort involves the Federal Reserve buying up $267 billion dollars worth of Treasury Bonds, considered a very safe investment given their historically low interest rates.

Bernanke had claimed in the spring that the Fed would be out of the stimulus game, but subsequent disappointing economic news prompted a renewal of a preexisting effort to ensure a recovery. However, Operation Twist is a weak and temporary measure, especially given Bernanke's ominous words about could happen by the end of the year. He sounded pessimistic about the prospects for recovery this year, downgrading his earlier, and rosier, prediction that unemployment would drop below 8%. And Bernanke justified his decision not to have the Fed promote a bigger asset buy, saying that "we have to get further information about the state of the economy, about where things are going and about what’s happening in Europe."

Bernanke went on to echo others' frustration with Congress, reiterating his fear that tight domestic policy was, and would continue to, get in the way of a robust recovery. Bernanke admitted that further bad news would require more Fed juice. Most observers saw Bernanke’s admission as a pledge to do more should the economy worsen, likely in the case of more economic bad news or a eurozone collapse.

But Sarah Binder at MonkeyCage notes that the Fed's next session of the Federal Reserve would come August 1st, in the midst of the Presidential campaign. Were Bernanke to act then, it would certainly increase the Fed's politicization—Rick Perry may even go to Washington himself to enact vengeance.

Binder thinks more Fed stimulus risky move for Bernanke, but a potentially game-changing one for Obama. Further, Binder argues that the Fed's reputation, one of the vital sources of its influence over the financial markets, would be in jeapordy should Bernanke become a serious issue in the 2012 election.

John Cassidy at the New Yorker describes what could happen:

If job growth perks up of its own accord, it will give Obama a boost. But let’s assume it doesn’t perk up. Going into the convention season and September-October, the Fed will be busy trying to gee up the economy. If past history is a guide, this will lead to a rally on Wall Street, and it will also give a modest boost, probably of temporary nature, to the economy at large.

It bears mentioning again, for the hundredth time, that Ben Bernanke was a Republican appointee. The vitriol against him, and the role he may play in the 2012 campaign, is just another in a long line of examples showing how far to the right the Republican party has moved. If you hear Romney take a line from Ron Paul start talking about Bernanke as public enemy #1, ask him what he would be doing differently. Because Bernanke proved again today that, for all his faults, he is no reckless partisan. Most left, and center-left, economists think his response has been too tepid. Should he be hamstrung by partisan politics, we’ll have no institution left to stand as a bulwark against the growing tide of international financial collapse.

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