(See the accompanying video for the complete interview.)
Mishkin also lauded Bernanke’s ability to stem inflation and the effects of the financial crisis on the U.S. and world economies.
“The shock that we had from this financial crisis is in many ways worse and more complicated than the one that created the Great Depression,” said Mishkin who is a professor of economics at Columbia University. “But in contrast to that episode, when the Fed fiddled around when the economy burned, Ben Bernanke has taken charge and taken steps that were gutsy that have actually helped this economy get out of this mess.”
Mishkin brushed aside attacks on the Fed's independence, particularly from Congressman Ron Paul, who has introduced a bill to audit the Federal Reserve, with more than 250 sponsors.
"Ron Paul sees the Fed as always being secretive and so forth," he said. "He characterizes independence as secrecy, just not the way to think about it yet he's gotten a lot of support. That is very scary."
On China's reported recovery Mishkin said, "There's always been a problem with [trusting] Chinese statistics, and there is concern whether their recovery and stimulus can be sustainable. But China's demand has gone up and that's helped Australia's economy."
Mishkin also said that if the Fed were to tighten monetary policy down the road, the real concern would be political, not technical, said Mishkin.
"We can get out of the stimulus. But we have a huge problem of very large fiscal deficits and we haven't seen any serious discussions to deal with the fiscal sustainability in the long run."
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