The markets like stability, and they really like Bernanke. The Great Recession has not become another Great Depression the markets have rebounded, and Bernanke declared last week that the worst of the downturn appears to be over so Obama really had no choice but to reappoint Bernanke, even though White House economic adviser Lawrence Summers has yearned for the job. His motto, Wessel writes, was "whatever it takes." In his insider account In Fed We Trust: Ben Bernanke's War on the Great Panic, David Wessel details how Bernanke essentially turned himself into a fourth branch of government, exploiting a loophole in a 1932 law that gave the Fed wide latitude in "unusual and exigent circumstances" to become a virtual economic commander in chief, dropping several trillion dollars into the nation's credit jet stream without presidential or congressional input, inaugurating all kinds of unprecedented programs with obscure acronyms. But that was before the chaos, before the collapses of Bear Stearns and Merrill Lynch, Fannie and Freddie, Lehman Brothers, AIG and WaMu, before Bernanke called upon decades of historical study to start dispensing money to banks and then quasi-banks and then companies that weren't banks at all. Otherwise, Bernanke mostly tried to continue Greenspan's policies, which were wildly popular at the time. Before the markets went haywire, he was building a reputation at the Fed as a collegial and unassuming technocrat who had none of the cult of personality that had swirled around Alan Greenspan and he actually tried to make himself understood. Bush appointed him to the Federal Reserve Board in 2002, his only brush with politics had been a stint on his local school board. He was a nice Jewish boy from small-town South Carolina who had pursued a career of scholarship before George W. Bernanke was at the President's side when he made the announcement and heard Obama say that Bernanke had "led the Fed through one of the worst financial crises that this nation and this world have ever faced." (Read Obama's remarks about Bernanke.)īernanke's is in many ways an inspiring story, a financial overlord from Main Street rather than Wall Street, from the faculty lounge rather than the corridors of power, from the realm of pragmatism and analysis rather than partisanship and ideology. And while the blaze hasn't been extinguished, it's starting to look like it's under control, which is why President Barack Obama reappointed Fireman Ben to a second term on Tuesday. economy, exercising unprecedented powers and sidestepping the democratic process, figuring that desperate times called for desperate measures. He blasted a fire hose full of dollars at the U.S. So when the financial markets melted down in 2008, the mild-mannered, consensus-minded, professorial ex-professor vowed to avoid the errors of omission the sluggish Fed had made in the 1930s and do everything possible to prevent the crisis from becoming a calamity. One thing he knew was that he never wanted to see another one. Federal Reserve, he was an ivory-tower economist who trained at Harvard and MIT, taught at Stanford and Princeton and may have learned more about the Great Depression than anyone else on the planet. Follow Ben Bernanke was chairman of the U.S.
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