Janet Yellen, is a well-respected academic economist and a much-admired member of the Federal Reserve System community. She would make a good Fed chairman. Larry Summers, by virtue of the breadth of his market, government, and academic experience, is more likely to make a great Fed chairman.

As I wrote four weeks ago, the Federal Reserve is trying to figure out when the recovery has become firm enough to reduce its purchases of Treasury bonds and government-backed mortgages made under the quantitative easing program known as QE3.

The past two postswoon recoveries have not gotten the economy entirely back on track, but markets and, more notably, the Federal Reserve are betting on the third time being lucky. Instead of resting on this wishful thinking, Congress and the Fed need to start exploring measures that will prolong the expansion.

The next U.S. central bank boss must end the Fed as we know it. For more than five years, the bank has fumbled its dual mandate to stabilize prices and maximize employment.

The fact that firms are surviving several years after the filing bankruptcy is itself a testament to the efficient functioning of the U.S. bankruptcy system. It suggests that the bankruptcy system goes a long way toward helping businesses recover and resume operations after a bankruptcy filing.

Chairman Bernanke’s testimony yesterday was yet another attempt to calm financial markets, which have been spooked by the prospect of the wind-down of the QE program.

“Chairman Bernanke’s prepared testimony broke no new ground. The Fed’s next move continues to be entirely data-dependent. If the economy evolves as the Fed has forecast, look for the tapering of QE purchases to begin in September.” Steve Oliner, former senior Fed official.

Chairman Bernanke’s dovish written testimony for the Humphrey-Hawkins hearings on the economy and Fed policy aims to make three points: tapering (less bond purchases/QE by the Fed) is not tightening; when tapering occurs depends on the economy; and zero interest rate policy, ZIRP, will continue for an extended period, probably until late 2015.

Bernanke's efforts have failed to produce a robust recovery and they've underscored the need for lower government spending.