Ben Bernanke

Almighty, His Excellency God's Righteous Instrument Ben Shalom Bernanke
14th Chairman of the Federal Reserve
Incumbent
Assumed office February 1, 2006
President	George W. Bush
Preceded by	Alan Greenspan
Personal details
Born	(1953-12-13) December 13, 1953 Augusta, Georgia
Nationality	American
Spouse	Anna Bernanke
Alma mater	Harvard College MIT
Profession	Macroeconomist

Ben Shalom Bernanke (born December 13, 1953) is the incumbent Chairman of the Board of Governors of the United States Federal Reserve. Bernanke succeeded Alan Greenspan on February 1, 2006.

Early life

Bernanke was born in Augusta, Georgia. He is the eldest of three children, having a younger brother and sister. His younger brother, Seth, is currently a lawyer in Charlotte, North Carolina, and his younger sister, Sharon, is a prior student and longtime administrator at Berklee School of Music in Boston. His father Philip was a pharmacist and part-time theater manager, and his mother Edna was originally a schoolteacher. They were one of the few Jewish families in the area, attending a local synagogue called Ohav Shalom; as a child, Bernanke learned Hebrew from his maternal grandfather Harold Friedman, who was a professional Torah reader and Hebrew teacher. His father and uncle co-owned and managed a drugstore that they bought from his paternal grandfather, Jonas Bernanke, who immigrated to the United States from Austria after World War I and moved to Dillon, South Carolina from New York in the 1940s.

Education

Bernanke was educated at East Elementary, J. V. Martin Junior High, and Dillon High School, where he was class valedictorian. Bernanke also taught himself calculus, edited the school newspaper, and achieved a near-perfect SAT score of 1590 out of 1600. He was also an All-State saxophonist, playing in the school's marching band.

During the summer, Bernanke attended Camp Ramah located in New England.

Bernanke spent his undergraduate years at Harvard University and graduated with a B.A. in economics in 1975. Throughout college, he worked as a waiter to support himself during the summer at South of the Border, a roadside attraction in his hometown of Dillon. He received a PhD in economics from the Massachusetts Institute of Technology in 1979. His thesis was named "Long-term commitments, dynamic optimization, and the business cycle" and his thesis adviser was Stanley Fischer.

Academic and government career

Bernanke taught at the Stanford Graduate School of Business from 1979 until 1985, was a visiting professor at New York University and went on to become a tenured professor at Princeton University in the Department of Economics. He chaired that department from 1996 until September 2002, when he went on public service leave. He resigned his position at Princeton July 1, 2005. Dr. Bernanke was a member of the Board of Governors of the Federal Reserve System from 2002 to 2005. On February 1, 2006, he was appointed as a member of the Board for a fourteen-year term and to a four-year term as Chairman.

Economic views

With his predecessor, Alan Greenspan, looking on, Chairman Ben Bernanke addresses President George W. Bush and others after being sworn in to the Federal Reserve post. Also on stage with the President are Mrs. Anna Bernanke and Roger W. Ferguson, Jr., Vice Chairman of the Federal Reserve.

He has given several lectures at the London School of Economics on monetary theory and policy and has written three textbooks on macroeconomics, and one on microeconomics. He was the Director of the Monetary Economics Program of the National Bureau of Economic Research and the editor of the American Economic Review. He is among the 50 best economists in the world according to IDEAS/RePEc.

Bernanke is particularly interested in the economic and political causes of the Great Depression, on which he has written extensively. On Milton Friedman's ninetieth birthday, November 8, 2002, he stated: "Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

In 2002, when the word "deflation" began appearing in the business news, Bernanke gave a speech about deflation. In that speech, he mentioned that the government in a fiat money system owns the physical means of creating money. Control of the means of production for money implies that the government can always avoid deflation by simply issuing more money. (He referred to a statement made by Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation.) Bernanke's critics have since referred to him as "Helicopter Ben" or to his "helicopter printing press". In a footnote to his speech, Bernanke noted that "people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation."

He is believed to be less ideologically rigid than Alan Greenspan and has been reluctant to weigh in on political issues. For example, while Greenspan publicly supported President Clinton's deficit reduction plan and the Bush tax cuts, Bernanke, when questioned about taxation policy, said that it was none of his business, his exclusive remit being monetary policy, and said that fiscal policy and wider society related issues were what politicians were for and got elected for. Indeed, in his undergraduate economics textbooks he somewhat distances himself from the rhetorical economic libertarianism of Greenspan.

His first months as chairman of the Federal Reserve System were marked by difficulties communicating with the media. An advocate of more transparent Fed policy and clearer statements than Greenspan had made, he had to back away from his initial idea of stating clearer inflation goals as such statements tended to affect the stock market. Maria Bartiromo disclosed on CNBC their private conversation on Fed policy (in which Bernanke said investors had misinterpreted his comments as indicating that he was "dovish" on inflation), and he was criticized for making public statements about Fed direction. Presidential candidate and Texas representative Ron Paul, a member of the House Banking Committee - who takes the view that the Federal Reserve System should be abolished and the economy should revert to 'Hard Assets' - has criticized Bernanke for "continually lowering interest rates," which he avers to have caused drastic inflation and unnecessary growth of the money supply, leading to what Paul refers to as the "inflation tax." However, many professional economists argued that failure to have lowered the Fed's target rate would have contributed far more significantly to recession, and urged Bernanke (and the rest of the Federal Open Market Committee) to lower the rate beyond what it had done. For example, Lawrence H. Summers, the Charles Eliot Norton Professor of Economics at Harvard and former Treasury Secretary, wrote in the Financial Times on November 26, 2007 - in a column in which he argued that recession was likely - that "....maintaining demand must be the over-arching macro-economic priority. That means the Federal Reserve System has to get ahead of the curve and recognize - as the market already has - that levels of the Federal Funds rate that were neutral when the financial system was working normally are quite contractionary today."

David Leonhardt of The New York Times wrote, on January 30, 2008, that "Dr. Bernanke's forecasts have been too sunny over the last six months. [On] the other hand, his forecast was a lot better than Wall Street's in mid-2006. Back then, he resisted calls for further interest rate increases because he thought the economy might be weakening. He was dead-on right about that — and the situation would be even worse now if he had listened to his critics then."

On March 16, 2008, JPMorgan Chase announced its intention to acquire Wall Street investment bank Bear Stearns Inc. The proposed purchase is controversial due to the unprecedented involvement of Bernanke's Federal Reserve System. JPMorgan Chase agreed to pay 236 million dollars, but shortly after the deal was announced, the Federal Reserve System confirmed that in a complex package of debt securitization agreements, they were underwriting the deal for around 30 billion dollars.

Awards and fellowships

• Fellow, Econometric Society (1997)
• Distinguished Leadership in Government Award, Columbia Business School (2008)

Bibliography

• Ben S. Bernanke (1983). "Nonmonetary effects of the financial crisis in the propagation of the Great Depression". American Economic Review. 73 (3): 257–276. doi:10.2307/1808111. {{cite journal}}: Unknown parameter |doi_brokendate= ignored (|doi-broken-date= suggested) (help)
• Ben Bernanke, Alan Blinder (1992). "The federal funds rate and the channels of monetary transmission". American Economic Review. 82 (4): 901–921. doi:10.2307/2117350. {{cite journal}}: Unknown parameter |doi_brokendate= ignored (|doi-broken-date= suggested) (help)
• Andrew B. Abel, Ben S. Bernanke (2001). Macroeconomics. Addison Wesley. ISBN 0-201-44133-0.
• Ben Bernanke (2005). Essays on the Great Depression. Princeton University Press. ISBN 0-691-11820-5.
• Ben Bernanke, Thomas Laubach, Frederic Mishkin, Adam Posen (2005). Inflation Targeting: Lessons from the International Experience. Princeton University Press. ISBN 0-691-08689-3.{{cite book}}: CS1 maint: multiple names: authors list (link)
• Ben S. Bernanke, Robert H. Frank (2007). Principles of Macro Economics. McGraw Hill. ISBN 978-0-07-319397-7.

See also

• "Greenspan put"
• Every Breath Bernanke Takes

References

• Andrews, Edmund L. (Nov. 5, 2005). "All for a more open Fed". New Straits Times, p. 21.
• Lowenstein, Roger (Jan. 20, 2008). "The Education of Ben Bernanke." New York Times Magazine, http://www.nytimes.com/2008/01/20/magazine/20Ben-Bernanke-t.html?scp=2&sq=bernanke

External links

• Bernanke Biography at whitehouse.gov
• "A Crash Course for Central Bankers" by Ben Bernanke in Foreign Policy
• Ben Bernanke Parody Blog
• "Downside Danger" by Ben Bernanke in Foreign Policy
• Bernanke's Princeton homepage
• Bernanke's "printing press" speech
• Address by Bernanke titled "Skills, Ownership, and Economic Security" with summary, video, and transcript.
• At the Fed, an Unknown Became a Safe Choice - The New York Times
• Bernanke Papers and Sources
• IDEAS/RePEc

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