Ben Bernanke: Wikis


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Ben Bernanke

Assumed office 
February 1, 2006
Deputy Donald Kohn
Nominated by George W. Bush
Barack Obama
Preceded by Alan Greenspan

In office
President George W. Bush
Preceded by Harvey S. Rosen
Succeeded by Edward Lazear

In office
Nominated by George W. Bush

Born December 13, 1953 (1953-12-13) (age 56)
Augusta, Georgia
Nationality American
Spouse(s) Anna Friedmann
Alma mater Harvard University (B.A.)
MIT (Ph.D.)

Ben Shalom Bernanke[1] (pronounced /bərˈnænki/ bər-NAN-kee;[2] born December 13, 1953) is an American economist, and the current Chairman of the United States Federal Reserve. Previously, he served as Fed Governor and Chairman of President George W. Bush's Council of Economic Advisers. In 2009, he was named the TIME magazine person of the year.[3]


Early and personal life

Born in Augusta, Georgia, Bernanke was raised in a ranch-style house on East Jefferson Street in Dillon, South Carolina.[4] His father Philip was a pharmacist and part-time theater manager, and his mother Edna was an elementary schoolteacher, although she gave it up once Ben was born.[5] He is the eldest of three children, having a brother and sister. His younger brother, Seth, is a lawyer in Charlotte, North Carolina, and his younger sister, Sharon, is a longtime administrator at Berklee College of Music in Boston.

The Bernankes were one of the few Jewish families in the area, attending a local synagogue called Ohav Shalom;[6] as a child, Bernanke learned Hebrew from his maternal grandfather Harold Friedman, who was a professional hazzan, shochet, and Hebrew teacher.[7][8] His father and uncle co-owned and managed a drugstore that they bought from his paternal grandfather, Jonas Bernanke.[4] Jonas was born in Boryslav, Austria–Hungary (today part of Ukraine), on January 23, 1891, and emigrated to the United States from Przemyśl, Poland (part of Austria–Hungary until 1919). He arrived at Ellis Island, aged 30, Thursday, June 30, 1921, with his wife Pauline, aged 25. On the ship's manifest, Jonas' occupation is listed as "clerk" and Pauline's as "doctor med."[9][10][11][12] They moved to Dillon, South Carolina, from New York in the 1940s.[13] Bernanke's mother often worked in the family drugstore, having given up her job as a school teacher when her son was born, and Bernanke also assisted from time to time.[14]

Young adult

Bernanke worked construction on a new hospital and waited tables at a restaurant at nearby South of the Border, a roadside attraction in his hometown of Dillon, before leaving for college.[4][15] To support himself throughout college, he worked during the summers at South of the Border.[4][16]


As a teenager in the 1960s in the small town of Dillon, South Carolina, Bernanke used to help roll the Torah scrolls in his local synagogue. Although he keeps his beliefs private, his friend Mark Gertler, chairman of New York University's economics department, commented in 2005 that, "it is really embedded in who he (Bernanke) is".[17] On the other hand, the Bernanke family was concerned that Ben would "lose his Jewish identity" if he went to Harvard. Fellow Dillon native Kenneth Manning, an African-American who would eventually become a professor of the History of Sciences at MIT, helped assuage the family that "there were Jews in Boston." Once at Harvard, Manning took Bernanke to a Rosh Hashanah services in Brookline his freshman year. Manning found the services more meaningful than Bernanke did.[18]


Bernanke was educated at East Elementary, J. V. Martin Junior High, and Dillon High School, where he was class valedictorian and played saxophone in the marching band.[19] Since his high school did not offer calculus, he learned it on his own.[20][21] Bernanke achieved a SAT score of 1590 out of 1600.[20][22] He was also an All-State saxophonist, playing in the school's marching band.[23] Bernanke attended Harvard University, where he lived in Winthrop House and graduated with a B.A. in economics summa cum laude in 1975. Coincidentally, another Winthrop House resident at the time was fellow 1975 graduate Lloyd Blankfein, future CEO of Goldman Sachs.[24][25] He received his Ph.D. 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.[26]

Adult life

Bernanke met his wife Anna, a schoolteacher, on a blind date. She was a student at Wellesley College, and he was in graduate school at MIT. The Bernankes have two children. They refinanced their Capitol Hill home in late 2009 because they "had an adjustable-rate mortgage and it exploded." Now they have a 30-year fixed rate mortgage at a rate of a little over 5%. Bernanke and his wife own just one car, a Ford Focus.[27]

Academic and government career

Bernanke meeting with United States President Barack Obama

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.

Bernanke served as a member of the Board of Governors of the Federal Reserve System from 2002 to 2005. In one of his first speeches as a Governor, entitled "Deflation: Making Sure It Doesn't Happen Here," he outlined what has been referred to as the Bernanke Doctrine.[28]

In June 2005, Bernanke was named Chairman of President George W. Bush's Council of Economic Advisers, and resigned as Fed Governor. The appointment was widely viewed as a test run to ascertain if Bernanke could be Bush's pick to succeed Greenspan as Fed chairman the next year.[29] He held the post until January 2006.

Chairman of the United States Federal Reserve

On February 1, 2006, President Bush appointed Bernanke to a fourteen-year term as a member of the Federal Reserve Board of Governors, and to a four-year term as Chairman.[30][31] By virtue of the chairmanship, he sits on the Financial Stability Oversight Board that oversees the Troubled Asset Relief Program. He also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policy making body.

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.[32] Maria Bartiromo disclosed on CNBC comments from their private conversation at the White House Correspondents' Association Dinner.[33] She reported that Bernanke said investors had misinterpreted his comments as indicating that he was "dovish" on inflation. He was sharply criticized for making public statements about Fed direction, which he said it was a "lapse in judgment."

During Bernanke's first term as Chairman, the Federal Reserve experienced its largest increase of power since its creation in 1913.[34]

On August 25, 2009, President Obama announced he would nominate Bernanke to a second term as chairman of the Federal Reserve. In a short statement in Martha's Vineyard, with Bernanke standing at his side, Obama said Bernanke's background, temperament, courage and creativity helped to prevent another Great Depression in 2008.[35] When Senate Banking Committee hearings on his nomination began on December 3, 2009, several Senators from both parties indicated they would not support a second term.[36][37][38][39][40][41] However, Bernanke was confirmed for a second term as Chairman on January 28, 2010, by a 70–30 vote of the full Senate,[42] historically the narrowest margin for any occupant of the position.[43] (For the roll-call vote, see Obama confirmations, 2010.) The Senate first voted 77–23, Bernanke winning more than the 60 approval votes needed to overcome the possibility of a filibuster.[44] On a second vote to confirm, the 30 dissents came from 11 Democrats, 18 Republicans and one independent.[44]

Controversies as Fed Chairman

Merrill Lynch merger with Bank of America

In a letter to Congress from New York State Attorney General Andrew Cuomo dated April 23, 2009, Bernanke was mentioned along with former Treasury Secretary Henry Paulson in allegations of fraud concerning the acquisition of Merrill Lynch by Bank of America. The letter alleged that the extent of the losses at Merrill Lynch were not disclosed to Bank of America by Bernanke and Paulson. When Bank of America CEO Kenneth Lewis informed Paulson that Bank of America was exiting the merger by invoking the "Materially Adverse Change" clause Paulson immediately called Lewis to a meeting in Washington. At the meeting, which allegedly took place on December 21, 2008, Paulson told Lewis that he and the board would be replaced if they invoked the MAC clause and additionally not to reveal the extent of the losses to shareholders. Paulson stated to Cuomo's office that he was directed by Bernanke to threaten Lewis in this manner.[45] Congressional hearings into these allegations were conducted on June 25, 2009, with Bernanke testifying that he did not bully Ken Lewis. Under intense questioning by members of Congress, Bernanke said, "I never said anything about firing the board and the management [of Bank of America]." In further testimony, Bernanke said the Fed did nothing illegal or unethical in its efforts to convince Bank of America not to end the merger. Lewis told the panel that authorities expressed "strong views" but said he would not characterize their stance as improper.[46]

AIG bailout

According to a January 26, 2010, column in The Huffington Post, a whistleblower has disclosed documents providing "'troubling details' of Bernanke's role in the AIG bailout". Republican Senator Jim Bunning of Kentucky said on CNBC that he had seen documents which show Bernanke overruled recommendations from his staff in bailing out AIG. The columnist says this raises questions as to whether or not the decision to bail out AIG was necessary. Senators from both parties who support Bernanke say his actions averted worse problems and outweigh whatever responsibility he may have for the financial crisis.[47]

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 most published 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. Before Bernanke's work, the dominant monetarist theory of the Great Depression was Milton Friedman's view that it had been largely caused by the Federal Reserve's having reduced the money supply. In a speech on Milton Friedman's ninetieth birthday (November 8, 2002), Bernanke said, "Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna [Schwartz, Friedman's coauthor]: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."[48] Bernanke has cited Milton Friedman and Anna Schwartz in his decision to lower interest rates to zero.[49] Anna Schwartz however is highly critical of Bernanke and wrote an opinion piece on New York Times to advise President Obama against his reappointment to Chair of Federal Reserve. Bernanke focused less on the role of the Federal Reserve, and more on the role of private banks and financial institutions.[50] Bernanke found that the financial disruptions of 1930–33 reduced the efficiency of the credit allocation process; and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand, identifying an effect he called the financial accelerator. When faced with a mild downturn, banks are likely to significantly cut back lending and other risky ventures. This further hurts the economy, creating a vicious cycle and potentially turning a mild recession into a major depression.[51] Economist Brad DeLong, who had previously advocated his own theory for the Great Depression, notes that the current financial crisis has increased the pertinence of Bernanke's theory.[52]

In 2002, when the word "deflation" began appearing in the business news, Bernanke gave a speech about deflation.[53] 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 said "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost." (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."[53] 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. But Bernanke has been identified by the Wall Street Journal and a close colleague as a "libertarian-Republican" in the mold of Alan Greenspan.[49]

In 2005 Bernanke coined the term saving glut, the idea, which does not take into account time preference, that a worldwide oversupply of savings finances the current account deficits of the United States and keeps interest rates low.[54]

Texas representative Ron Paul, a member of the House Banking Committee who takes the view that the Federal Reserve System should be abolished,[55] 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."[56] Paul has also criticized Milton Friedman's influence on Bernanke.[49] However, many economists have 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, Larry Summers, who currently serves as Director of the White House's National Economic Council under President Barack Obama, 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."[57]

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."[58]

Awards and fellowships


See also


  1. ^ Bernanke's first name is Ben, not Benjamin; it is not an abbreviated name. (ref: "Big Ben", Slate, October 24, 2005) Bernanke's middle name is Shalom.
  2. ^ See inogolo:pronunciation of Ben Bernanke.
  3. ^ Michael Grunwald (2009-12-16). "Person of the Year 2009".,28804,1946375_1947251_1947520,00.html. Retrieved 2010-01-30. 
  4. ^ a b c d Phillips, Michael M. (2009-02-14). "Fed Chief's Boyhood Home Is Sold After Foreclosure". The Wall Street Journal (Dow Jones & Company): p. A1. 
  5. ^ David Wessel, In Fed We Trust: Ben Bernanke's War on the Great Panic (New York: Crown Business, 2009), p. 69.
  6. ^ "Federal Reserve Speech: Chairman Ben S. Bernanke At the presentation of the Order of the Palmetto, Dillon, South Carolina". 2006-09-01. Retrieved 2010-01-30. 
  7. ^ Kirchhoff, Sue (2006-01-31). "New Fed chief will face an economy with issues". USA Today. Retrieved 2008-11-08. 
  8. ^ a b "Person of the Year (2009)".,28804,1946375_1947251,00.html/. 
  9. ^ "The New York Times Store > The Times/Ellis Island Legacy Keepsake". 1942-02-15. Retrieved 2010-01-30. 
  10. ^ "The Times/Ellis Island Legacy Keepsake". 1921-06-30. Retrieved 2010-01-30. 
  11. ^ "The Times/Ellis Island Legacy Keepsake". 1921-06-30. Retrieved 2010-01-30. 
  12. ^ "The Times/Ellis Island Legacy Keepsake". 1921-06-30. Retrieved 2010-01-30. 
  13. ^ "FRB: Speech, Bernanke-Financial Access for Immigrants: The Case of Remittances-April 16, 2004". Retrieved 2010-01-30. 
  14. ^ "Speech". Federal Reserve. Retrieved 2010-01-30. 
  15. ^ "60 Minutes Video - 60 Minutes, 06.07.09". Retrieved 2010-01-30. 
  16. ^ John M. Broder (August 20, 2007). "In First Crisis on the Job, Bernanke's About-Face Is Weighed". The New York Times. Retrieved 2008-03-15. 
  17. ^ "The Daily Forward: Fed Nominee Bernanke Was Molded By Upbringing in Small-town South". 2005-11-18. Retrieved 2010-01-30. 
  18. ^ David Wessel, In Fed We Trust: Ben Bernanke's War on the Great Panic (New York: Crown Business, 2009), pp. 70–71.
  19. ^ David Wessel, In Fed We Trust: Ben Bernanke's War on the Great Panic (New York: Crown Business, 2009), p. 70.
  20. ^ a b Romero, Frances (2009-03-16). "Federal Reserve Chairman Ben Bernanke". Time.,8599,1885318,00.html. Retrieved 2010-01-28. 
  21. ^ Johnston, Danny (2005-10-24). "Bernanke is a student of Great Depression, Red Sox". USA Today. Associated Press. Retrieved 2010-01-28. 
  22. ^ Ben White (November 15, 2005). "Bernanke Unwrapped". The Washington Post. Retrieved 2008-01-15. 
  23. ^ "Next Fed chief: smartest ever? |".<!. 2005-10-26. Retrieved 2010-01-30. 
  24. ^ "Lloyd C. Blankfein". Retrieved 2010-01-24. 
  25. ^ "Meet The Next Larry Summers". Retrieved 2010-01-24. 
  26. ^ "Bernanke's Ph.D. thesis" (PDF). Retrieved 2008-04-12. 
  27. ^ TIME magazine, December 16 2009, p.29
  28. ^ "Deflation: Making Sure "It" Doesn't Happen Here, Remarks by Governor Ben S. Bernanke Before the National Economists Club, Washington, D.C. November 21, 2002". 
  29. ^ Edmund L. Andrews, David Leonhardt, Eduardo Porter, Louis Uchitelle At the Fed, an Unknown Became a Safe Choice The New York Times, October 26, 2005 (accessed January 31, 2010)
  30. ^ "Bernanke Biography". Retrieved 2010-01-30. 
  31. ^ ""At the Fed, an Unknown Became a Safe Choice". ''New York Times'' (October 26, 2005)". 2005-10-26. Retrieved 2010-01-30. 
  32. ^ Lowenstein, Roger (2008-01-20), "The Education of Ben Bernanke", The New York Times, 
  33. ^ "Fed Chief Calls His Remarks A Mistake". Retrieved 2010-01-30. 
  34. ^ Pittman, Mark (August 25, 2009). "Court Orders Fed to Disclose Emergency Bank Loans". Bloomberg News ( Retrieved August 26, 2009. 
  35. ^ Hilsenrath, Jon (2009-08-26). "Jon Hilsenrath, Elizabeth Williamson and Jonathan Weisman, "Calm in Crisis Won Fed Job: Obama Sticks With 'Bold, Persistent' Chief, but Next Term Could Be Tense if Rates Rise", ''Wall Street Journal'' (August 27, 2009)". Retrieved 2010-01-30. 
  36. ^ "McCain To Oppose Bernanke Reconfirmation". Retrieved 2010-01-30. 
  37. ^ Sloan, Steven. "Senate Vote on Bernanke Confirmation Set for Thursday". Retrieved 2010-01-30. 
  38. ^ "Populist backlash puts Federal Reserve Chairman Ben Bernanke under siege". Retrieved 2010-01-30. 
  39. ^ Chan, Sewell (2010-01-22). "2 Key Senators Oppose a Second Term for Bernanke". The New York Times. p. A1. Retrieved 2010-01-22. 
  40. ^ "Release: Sanders Puts Hold on Bernanke". December 2, 2009. Retrieved January 24, 2010. 
  41. ^ "Senate Dems Not Sure They Can Get Enough Votes to Reconfirm Bernanke". ABC News. January 21, 2010. Retrieved January 24, 2010. 
  42. ^ "U.S. Senate Roll Call Vote". U.S. Senate. 2010-01-28. Retrieved 2010-01-28. 
  43. ^ Irwin, Neil (2010-01-28). "Senate confirms Bernanke for second term as Federal Reserve chairman". The New York Times. Retrieved 2010-01-28. 
  44. ^ a b Chan, Sewell (2010-01-28). "Bernanke wins a second term, but it's a tepid victory". The New York Times. Retrieved 2010-01-29. 
  45. ^ "Andrew Cuomo letter to Congress, April 23, 2009" (PDF). Retrieved 2009-05-06. 
  46. ^ "Lawmakers hit out at Paulson over BofA-Merrill". Reuters 12:04 pm ET 07/16/09
  47. ^ Grim, Ryan "Is Bernanke Hiding A Smoking Gun?", The Huffington Post. January 27, 2010
  48. ^ FRB Speech: Remarks by Governor Ben S. Bernanke, At the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois, November 8, 2002
  49. ^ a b c Penn Bullock from the December 2009 issue. "Bernanke’s Philosopher — Reason Magazine". Retrieved 2010-01-30. 
  50. ^ Bernanke, Ben S., "Non-Monetary Effects of the Financial Crisis in the Propagation of the Great Depression," American Economic Review, 73 (June 1983), pp. 257–76.
  51. ^ ""The Financial Accelerator and the Credit Channel", The Credit Channel of Monetary Policy in the Twenty-first Century Conference, Federal Reserve Bank of Atlanta, Atlanta, Georgia (June 15, 2007)". 2007-06-15. Retrieved 2010-01-30. 
  52. ^ Brad DeLong. "Lecture 10: Depressions and Panics, 1840–1933" Economics 113 – American Economic History UC Berkeley
  53. ^ a b "Speech, Bernanke -Deflation- November 21, 2002". Retrieved 2010-01-30. 
  54. ^ "Governor Ben S. Bernanke, The Global Saving Glut and the U.S. Current Account Deficit". March 2005. Retrieved 2009-06-05. 
  55. ^ I don't want to go back to the gold standards there's a better ... standard.-Ron Paul July 14, 2007 Candidates@Google 25:30
  56. ^ "Paul vs. Bernanke on Value of the Dollar". ABC News. December 13, 2007. Retrieved 2008-01-15. 
  57. ^ "Larry Summers in Financial Times". 
  58. ^ ""Bernanke's Midterm Tests" by David Leonhardt, The New York Times, Jan. 30, 2008". 
  59. ^ "Columbia Business School Annual Dinner". Retrieved 2008-05-08. 


Further reading

External links

Political offices
Preceded by
Harvey S. Rosen
Chairman of the Council of Economic Advisers
Succeeded by
Edward Lazear
Preceded by
Alan Greenspan
Chairman of the Federal Reserve
since 2006
United States order of precedence
Preceded by
John E. Potter
Postmaster General
United States order of precedence
Chairman of the Federal Reserve
since 2006
Succeeded by
Nancy Sutley
Chairman of the Council on Environmental Quality


Up to date as of January 14, 2010

From Wikiquote

Ben Shalom Bernanke (born 1953-12-13) is the Chairman of the Board of Governors of the United States Federal Reserve.


  • There’s no denying that a collapse in stock prices today would pose serious macroeconomic challenges for the United States. Consumer spending would slow, and the U.S. economy would become less of a magnet for foreign investors. Economic growth, which in any case has recently been at unsustainable levels, would decline somewhat. History proves, however, that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse
  • The economic repercussions of a stock market crash depend less on the severity of the crash itself than on the response of economic policymakers, particularly central bankers.
    • "A Crash Course for Central Bankers," Foreign Policy (September/October 2000)

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