As Ben Bernanke hands over the Federal Reserve chairmanship to Janet Yellen at the end of January, leadership of the central bank will be passed from one strident deflation foe to another.

All the way back in 2002, Bernanke in his speech “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” proposed what would become his program to fight deflation in response to the 2008 financial crisis: a zero fed funds rate and large-scale Treasury debt purchases aimed at bringing down interest rates to encourage economic activity. We came to know it as quantitative easing.

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Yet five years in, those policies are still entrenched (despite last month’s “taper”) with Yellen set on maintaining them.

What’s happened in the American economy since then? Not deflation, defined as a decrease in the broad price level. You can conclude that Bernanke’s experiment worked in achieving its purpose of making sure “it” didn’t happen here, but you can also conclude from the data that his purpose was misguided from the start and it backfired.

Bernanke’s seminal academic experience is the Great Depression, an era he interprets (influenced by Milton Friedman) as caused by deflation from the Fed.

But does deflation cause depression? That’s a question two economists, Andrew Atkeson and Patrick Kehoe, examined in a 2004 paper for the Federal Reserve Bank of Minneapolis. No, they say. Their data set of 17 countries across 100 years found that nearly 90% of periods of deflation did not have depression. They acknowledge an exception in the surprise deflation of the Great Depression, but say that it is “not an overwhelmingly tight link.”

But their point is not to try and refight the cause of the Great Depression, as Bernanke is wont to do, but defend the concept of deflation from the catastrophe ascribed to it. After all, what is so bad about falling prices? As the publisher and financial historian James Grant likes to point out, this is exactly what draws carloads of people to Walmart WMT, -1.02% every weekend.

The Walmart era of American economic history isn’t actually the contemporary one, but the 1879-1914 period when a surge in innovation and output made commodities cheaper and even food prices stable.

This was natural “good” deflation driven by the increase in the supply of goods — as opposed to a Fed-driven decrease in the money supply that Bernanke and Friedman blame for the Great Depression. People got the dual benefit of a robust economy and flat-to-falling prices.

Our modern economy not only has Walmart, but Target TGT, +0.82% , Costco COST, -0.86% , and iPhones AAPL, -3.17% whose prices seem to be cut in half every time a next generation is released. It’s extremely price competitive, yet prices overall won’t stop rising.

Since Bernanke began his deflation-chasing campaign in late 2008 there has been a 10% increase in the consumer price level. Current-dollar median weekly wages have risen only 7% during this time, meaning a shrinking standard of living for the middle class.

Contrary to what Republicans would like to think, this is not an Obama phenomenon but a secular stagnation of middle-class wage growth being sapped by rising prices.

How did one tech-driven boom in American history produce mild deflation and the other persistent inflation? Consider the difference in how the demand for money was met.

During the earlier period the U.S. was on the gold standard, and new money was issued upon market demand by the exchange of gold. This automatic, impersonal, and international system was dismantled piece-by-piece beginning in 1914, when World War I broke out and the Federal Reserve opened for business that fall.

The Fed as we know it today — a central bank that can create money at the push of a keystroke — was conceptualized in 1971 when President Richard Nixon ended the U.S.’s commitment to exchange foreign dollars for gold and provide some kind of market buffer to the Fed.

The difference in price fluctuations between then and now is not gold per se — it’s the fact that the market was much better at determining the economy’s need for money than the Fed. Today, the idea that the market can do most things better than government is a consensus, except when it comes to the money supply. Such a thought provokes the bogeyman of deflation, a myth maintained by Bernanke and other economists.

Not content to stop worrying about the deflation that never arrived or discontinue his response program to it, Bernanke last summer gave a speech in which he called out low and falling inflation as a bad thing — because it might be low enough or fall quickly enough to turn into deflation.

“It’s hard to explain to your uncle,” he conceded, his mind apparently able to grasp the popularity of everyday low prices. Bernanke’s successor Yellen — far less adroit a communicator — will have an even tougher time explaining why prices must always rise and never fall.

Too bad Americans can only take refuge in Walmart.