Ben S. Bernanke
Dr. Ben Shalom Bernanke, of New Jersey, is Chairman of the Board of Governors of the Federal Reserve System. He was sworn in on February 1, 2006. He also serves as Chairman of the Federal Open Market Committee.
In August, 2009, President Obama nominated Bernanke to serve a second term as Chairman of the Federal Reserve.
Record and controversies
On the economy
In February of 2006, Ben Bernanke, as President Bush's Chairman of the Council of Economic Advisers, was responsible for drafting the Economic Report of the President which claimed the following: "The economy has shifted from recovery to sustained expansion . . . . The U.S. economy continues to be well positioned for long-term growth." In this report, Bernanke projected the unemployment rate to be 5% from 2008 through 2011.
On July 20, 2006, Fed Chairman Bernanke referred to the economy as "robust" and "strong".
On February 15, 2007, Fed Chairman Bernanke said: "Overall economic prospects for households remain good. The labor market is expected to stay healthy. And real incomes should continue to rise. The business sector remains in excellent financial condition."
On July 18, 2007, Fed Chairman Bernanke said: "Employment should continue to expand . . . . The global economy continues to be strong . . . . financial markets have remained supportive of economic growth."
On February 27, 2008, Fed Chairman Bernanke said: the nonfinancial business sector remains in good financial condition with strong profits, liquid balance sheets, and corporate leverage near historic lows . . . . Projections for the unemployment rate in the fourth quarter of 2008 have a central tendency of 5.2 percent to 5.3 percent, up from the level of about 4.75 percent projected last July for the same period. By 2010, our most recent projections show output growth picking up to rates close to or a little above its longer-term trend, and the unemployment rate edging lower. The improvement reflects . . . . an anticipated moderation of the contraction in housing and the strains in financial and credit markets.
On June 9, 2008, Fed Chairman Bernanke said: “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”
On May 5, 2009, in front of the Joint Economic Committee, Fed Chairman Bernanke said: "Currently, we don’t think [the unemployment rate] will get to 10 percent." In November the unemployment rate hit 10.2%.
On the housing market
On July 1, 2005, Bernanke, then President Bush's Chairman of the Council of Economic Advisers had the following exchange with CNBC:
On February 15, 2006, Fed Chairman Bernanke said: "The housing market has been very strong for the past few years . . . . It seems to be the case, there are some straws in the wind, that housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise, but not at the pace that they had been rising. So we expect the housing market to cool, but not to change very sharply.
On February 15, 2007, Fed Chairman Bernanke said: "The weakness in housing market activity and the slower appreciation of house prices do not seem to have spilled over to any significant extent to other sectors of the economy."
On March 28, 2007, Fed Chairman Bernanke said: “The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.”
On May 17, 2007, Fed Chairman Bernanke said: “We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”
On February 27, 2008, Fed Chairman Bernanke said: "By later this year, housing will stop being such a big drag directly on GDP . . . . I am satisfied with the general approach that we’re currently taking."
July 1, 2005: Bernanke, then President Bush's Chairman of the Council of Economic Advisers had the following exchange with CNBC:
CNBC INTERVIEWER: "Ben, there's been a lot of talk about a housing bubble, particularly, you know from all sorts of places. Can you give us your view as to whether or not there is a housing bubble out there?"
BERNANKE: "Well, unquestionably, housing prices are up quite a bit; I think it's important to note that fundamentals are also very strong. We've got a growing economy, jobs, incomes. We've got very low mortgage rates. We've got demographics supporting housing growth. We've got restricted supply in some places. So it's certainly understandable that prices would go up some. I don't know whether prices are exactly where they should be, but I think it's fair to say that much of what's happened is supported by the strength of the economy.
INTERVIEWER: Tell me, what is the worst-case scenario? We have so many economists coming on our air saying ‘Oh, this is a bubble, and it’s going to burst, and this is going to be a real issue for the economy.’ Some say it could even cause a recession at some point. What is the worst-case scenario if in fact we were to see prices come down substantially across the country?
BERNANKE: Well, I guess I don’t buy your premise. It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.
On the financial crisis
On February 15, 2007, Fed Chairman Bernanke said: "The Federal Reserve takes financial crisis management extremely seriously, and we have made a number of efforts to improve our monitoring of the financial markets to study and assess vulnerabilities, and to strengthen our own crisis management procedures and our business continuity plans."
On February 28, 2008, Fed Chairman Bernanke said: “Among the largest banks, the capital ratios remain good and I don’t expect any serious problems . . . . among the large, internationally active banks that make up a very substantial part of our banking system.”
On July 16, 2008, Fed Chairman Bernanke said that Fannie Mae and Freddie Mac are “adequately capitalized” and “in no danger of failing.” Since then, Fannie Mae and Freddie Mac have received a $200 billion bailout and have been taken over by the federal government.
While Warren Buffett warned that derivatives were "financial weapons of mass destruction" that pose a "mega-catastrophic risk" to the economy in 2003, Bernanke supported the deregulation of these risky schemes.
In November of 2005, Mr. Bernanke was questioned by then-Senate Banking Committee Chairman Paul Sarbanes:
SARBANES: Warren Buffett has warned us that derivatives are time bombs, both for the parties that deal in them and the economic system. The Financial Times has said so far, there has been no explosion, but the risks of this fast growing market remain real. How do you respond to these concerns?
BERNANKE: I am more sanguine about derivatives than the position you have just suggested. I think, generally speaking, they are very valuable. They provide methods by which risks can be shared, sliced, and diced, and given to those most willing to bear them. They add, I believe, to the flexibility of the financial system in many different ways. With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly. The Federal Reserve’s responsibility is to make sure that the institutions it regulates have good systems and good procedures for ensuring that their derivatives portfolios are well managed and do not create excessive risk in their institutions.
On February 27, 2008, Fed Chairman Bernanke said: "If you have two investment banks doing an over-the-counter derivatives transaction, presumably they both are well-informed and they can inform that transaction without necessarily any government intervention."
On July 10, 2008, Fed Chairman Bernanke said: "Since September 2005, the Federal Reserve Bank of New York has been leading a major joint initiative by both the public and private sectors to improve arrangements for clearing and settling credit default swaps and other OTC derivatives . . . . I don’t think the system is broken, but it does need some improvement in execution.
Prior to his appointment as Chairman of the Federal Reserve Bernanke served as Chairman of the President's Council of Economic Advisers, from June 2005 to January 2006. On October 24, 2005, Bernanke, then Chairman of the President's Council of Economic Advisers (CEA), was appointed by President Bush to succeed Alan Greenspan as Chairman of the Board of Governors of the Federal Reserve System. Bernanke served as a member of the Board of Governors from August 2002 until just prior to his June 21, 2005, swearing-in as CEA chairman.
Bernanke is a "macroeconomist with interests in monetary policy and macroeconomic history." "He received a B.A. in economics in 1975 from Harvard University (summa cum laude) and a Ph.D. in economics in 1979 from the Massachusetts Institute of Technology." 
"Before becoming a member of the Board, Dr. Bernanke was the Howard Harrison and Gabrielle Snyder Beck Professor of Economics and Public Affairs and Chair of the Economics Department at Princeton University (1996-2002). Dr. Bernanke had served as a Professor of Economics and Public Affairs at Princeton since 1985." 
"Dr. Bernanke has published many articles on a wide variety of economic issues, including monetary policy and macroeconomics, and he is the author of several scholarly books and two textbooks. He has held a Guggenheim Fellowship and a Sloan Fellowship, and he is a Fellow of the Econometric Society and of the American Academy of Arts and Sciences. Dr. Bernanke served as the Director of the Monetary Economics Program of the National Bureau of Economic Research (NBER) and as a member of the NBER's Business Cycle Dating Committee. Dr. Bernanke's work with civic and professional groups includes having served two terms as a member of the Montgomery Township (N.J.) Board of Education." 
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Articles and resources
Related SourceWatch articles
- ↑ Ben Bernanke Bio at the Federal Reserve
- ↑ Edmund L Andres,.\ Obama to Nominate Bernanke to 2nd Term at Fed, New York Times, August 24, 2009.
- ↑ Bernanke quote sourcing, Sen. Sanders Newsroom: 
- Ben Bernanke, Ph.D., Princeton University Bio.
- Ben Bernanke in the Wikipedia.
- News Release: President Appoints Dr. Ben Bernanke for Chairman of the Federal Reserve, The Oval Office, October 24, 2005.
- Profile: Ben S. Bernanke, Washington Post, October 24, 2005.
By Ben S. Bernanke
- Remarks by Governor Ben S. Bernanke Before the National Economists Club, Washington, D.C., November 21, 2002: "Deflation: Making Sure 'It' Doesn't Happen Here."
- Remarks by Governor Ben S. Bernanke Before the Economics Roundtable, University of California, San Diego, La Jolla, California, July 23, 2003: "An Unwelcome Fall in Inflation?"
Articles & Commentary
- Matthew Benjamin, "Pitching Curves. Outspoken Ben Bernanke is shaking up the Federal Reserve," US News & World Report, December 29, 2003.
- Paul Krugman, "The Greenspan Succession," New York Times, January 25, 2005.
- John Tamny, "The Scary Side of Ben Bernanke. Bush should look elsewhere when Greenspan steps down," National Review, August 11, 2005.
- Martin Wolk, "Bush nominates Bernanke as next Fed chief. Top White House adviser to succeed Greenspan at central bank," MSNBC, October 24, 2005.
- "Bernanke's the man. President Bush's nominee to succeed Greenspan is expected to be chief economic adviser," CNN/Money, October 24, 2005.
- Tyler Cowen, "Ben Bernanke, economist," Marginal Revolution, October 24, 2005.
- Rich Miller, "Bernanke Gets His Chance," BusinessWeek, October 24, 2005.
- Daniel Gross, "Big Ben. Bernanke's a great choice for Fed chairman, but is he tough enough on inflation?" Slate, October 24, 2005.
- Michael T. Darda, "Bernanke Pros, Cons, and Intangibles. Our next Fed chair may keep us guessing well into next year," National Review, October 24, 2005.
- John Tamny, "Bernankeâ??s Output Gaps. The Fed nominee might be Greenspan II â?? but we could have done better," National Review, October 25, 2005.
- Henry Blodget, "What's in Bernanke's Wallet? A psycho-financial analysis of Fed chair nominee Ben Bernanke," Slate, October 25, 2005.
- "Betting on Ben," Reuters (The Economist), October 27, 2005: "The likely new chairman of Americaâ??s Federal Reserve Board is a first-rate academic. Will he be a similarly good central banker?"
- Paul Krugman, "Bernanke and the Bubble," New York Times (TruthOut), October 28, 2005.