Nick Biddle must retching somewhere in the spirit world that he isn’t alive and young and well today. Back in 1832, he was a vilified man. He unwittingly made himself the center of the 1832 presidential election and became a perfect target of the Jacksonians, who used his strenuous defense of the second Bank of the United States as its President to be the centerpiece of their campaign to re-elect Andrew Jackson.

Back then, Biddle was attacked viciously, called Old Nick and Czar Nick by his opponents.  They hung him in effigy in Hurra Boys parades. The more they hissed, the more he spent to try and beat them and the more it only fed the impression that Biddle was trying to buy the election for Henry Clay and the National Republicans. He played right into the hands of the Jacksonians looking to paint themselves as defending the rights of the common man of that time against the “monster bank”.

Today however, the central banker is looked upon as guru, an economic wizard, the chief steward of our the globe’s economy and its protector as well. He is an oracle of economic forecasts and provider or liquidity and fluidity that keeps the economic engine humming like motor oil. Thus Biddle’s successor as the head of the third Bank of United States (the Federal Reserve), Ben Bernanke, is named Time’s “Man of the Year” instead of being called Old Ben or Czar Benjamin or even “Helicopter Ben”.

How did this transformation suddenly take place? How did the Fed Chairman gain a degree of influence and power second only to and perhaps on par with the President? William McChesney Martin was Chairman of the Fed from 1951-1970. Remember him? His successors Arthur Burns and G. William Miller were pilloried in the financial press for their allowance of inflation, stagflation and knuckling under to the White House pressure on fiscal and monetary policy.

The change came about under Miller’s successor Paul Volcker. At first incredibly unpopular because he ratcheted up interest rates to 21 percent in order to tame inflation which caused the early 1980s recession, when the economy improved, so to did his image improve and soon he became lauded. Thus, if political partisans or others in the media wanted to credit someone other than the President or members of Congress for turning around the economy, all they had to do was give a hip and a hooray to the Fed Chairman.  He was the apolitical figure with the power to determine the nation’s economy with a tweak here and a little twist there in the manner of a piano tuner.  The levels of taxation, spending, budgets, entitlement programs, all of these things were stained by the dirty and stagnant political process. The Fed Chairman was someone who could get something done. He had real power to affect the lives of millions, not just in the U.S. but around the world.

As the financial services sector became the engine of the U.S. economy in the 1980s (replacing the steel industry that dominated the late 19th and early 20th century followed by the auto industry) it was only natural that a person who had the power to greatly affect that industry, with his control of interest rates and money supply, would become an important  figure (like a J.P Morgan, a John Rockefeller, a Henry Ford and even “Engine Charlie” Wilson).  It became even more so in the media age when  said important person would be on the nightly news testifying before Congress and have his name and face splashed all over magazines and newspapers for the power he enjoyed. This was the environment that Alan Greenspan inherited when he became Fed Chairman in 1987 and oh boy did he take advantage of it. Initially celebrated when he prevented the stock market crash of 1987 from becoming another depression, or even a mild recession (that came later), by 2000 he was elevated to god-like status, who very words could affect fortunes on the market. Or perhaps more accurately, the market itself was the god and Greenspan was its prophet like Mohammad and CNBC and Bloomberg commentators were imams and priests and preachers dispensing the faith.

Whatever Greenspan wanted he got from the policy makers who were technically his bosses.  He wanted fiscal discipline and controlled deficits from both presidents Bush I and Clinton and he got it. He wanted regulations to the market like Glass-Steagall removed and he got that. He wanted bailouts of banks and investments houses that lost money in Mexico and Russia and he got that.  He didn’t mind that billions were pumped into federal housing programs  and that happened too.  No one questioned his actions, outside of a few who were seen as cranks. He created bubbles in the economy and popped them like a would-be Zeus who plays with the lives of mortals.  Clinton could have fired Greenspan when he became president and gone his own way with economic policy when he got in charge in 1993, he chose not to. Bush II was the same way. Instead they renominated him and Congress cheerfully approved. Perhaps they feared the reaction of the markets if such a move happened. After all, one just doesn’t fire God, right?  Or maybe the policy makers were simply too happy with all the money pouring in tax coffers during the great prosperity of 1983-2008 which allowed them to have big government and police the world at pre-New Deal prices.  It seemed like a good bargain at the time.

Similarly Ben Bernanke is being lauded in the press as someone who has prevented another Depression even though he is following the very same policies of his predecessor,  incredibly low interest rates and printing lots of dough that created the excess of liquidity in the market to begin with, which allowed for over-investment in the derivative and housing markets which led to bad investments which led to bust that the Fed eventually had to step in to bail out.  Now the Fed has even more power than under Bernanke’s predecessors for they are the very spine holding the economy and presumably the world together.  Only its ability to create cash out of thin air prevented an economic China Syndrome but in so doing he put the government’s full faith and credit behind commercial banks and financial institutions. Instead using the crisis the Fed itself helped to create to re-order the nation’s economy away from the unstable financial sector, Bernanke instead made it even more dependent  on it. That’s why Wall Streeters got bailouts and bonuses to get them back on their feet while auto workers lost their jobs and saw their homes foreclosed on, because Bernanke knows who drives the economic engine now and its not Government Motors. The establishment knows this all too well. That’s why its house organ named him “Man of the Year.”

But perhaps times are changing. Seven members of the Senate’s banking committee voted no on his renomination and two Senators put holds on his nomination. That never would have happened even a year ago and certainly not under Greenspan. More and more in Congress are becoming skeptical that the God-King knows what he’s doing, let alone have anything to wear. If Great Recession changes persons perceptions of the Fed as being the all-powerful dispenser of prosperity to being a financial dictatorship with no accountability to the taxpayers whose m0ney was used to rescue the very financial firms that drove the economy into the ground, then perhaps the policy makers will finally take control of the nation’s economy back the way Jackson did when he vetoed the second B.U.S’ charter and won re-election because of it.