The legacy of Ben Bernanke: Mr Bernanke went to Washington

Posted: February 1, 2014 in economy
Tags: , ,

It was September 23rd, 2008, the week after Lehman Brothers had gone bankrupt and America was on the verge of a Second Great Depression. Ben Bernanke, chairman of the Federal Reserve, had joined Hank Paulson, the Treasury secretary, in trying to explain to Congress why it should pass a bailout bill. The public and Congress were hostile and Chris Dodd, the Senate Banking Committee chairman, pushed them to explain why this mattered for ordinary people, not just Wall Street.Mr Bernanke said:I’m a college professor. I was criticized for taking the job without having been working on Wall Street. I never worked on Wall Street. I don’t have those interests or those connections. My interest is solely for the strength and the recovery of the U.S. economy.When American politicians wheel out the humble-roots shtick, they are usually met with eye-rolling if not cynicism. But Mr Bernanke, the son of a drug store owner from a small town in South Carolina, pulled it off.As Mr Bernanke’s eight year tenure draws to a close today, most commenters consider the cornerstones of his legacy to be remaking the Fed as lender of last resort to save the financial system from collapse, which has been widely praised, and launching unorthodox monetary policies to restore growth afterwards, on which the jury is still out. I largely concur with that, but would add another important and …

via Economic Crisis


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