Ben Bernanke is a nerd and he just happens to be the most powerful nerd on the planet.
Bernanke is the 56-year-old chairman of the Federal Reserve, the central bank of the U.S., the most important and least understood force shaping the American — and global — economy. Those green bills featuring dead Presidents are labeled "Federal Reserve Note" for a reason: the Fed controls the money supply. It is an independent government agency that conducts monetary policy, which means it sets short-term interest rates — which means it has immense influence over inflation, unemployment, the strength of the dollar and the strength of your wallet. And ever since global credit markets began imploding, its mild-mannered chairman has dramatically expanded those powers and reinvented the Fed.
Professor Bernanke of Princeton was a leading scholar of the Great Depression. He knew how the passive Fed of the 1930s helped create the calamity — through its stubborn refusal to expand the money supply and its tragic lack of imagination and experimentation. Chairman Bernanke of Washington was determined not to be the Fed chairman who presided over Depression 2.0. So when turbulence in U.S. housing markets metastasized into the worst global financial crisis in more than 75 years, he conjured up trillions of new dollars and blasted them into the economy; engineered massive public rescues of failing private companies; ratcheted down interest rates to zero; lent to mutual funds, hedge funds, foreign banks, investment banks, manufacturers, insurers and other borrowers who had never dreamed of receiving Fed cash; jump-started stalled credit markets in everything from car loans to corporate paper; revolutionized housing finance with a breathtaking shopping spree for mortgage bonds; blew up the Fed's balance sheet to three times its previous size; and generally transformed the staid arena of central banking into a stage for desperate improvisation. He didn't just reshape U.S. monetary policy; he led an effort to "save the world economy."
Continue reading - Ben Bernanke - TIME's Person of the Year 2009
His critics in Congress — liberals and conservatives alike — couldn’t believe it Wednesday.
Fed Chairman Ben Bernanke? Time’s Person of the Year?
“Give me a break,” said Rep. John Conyers (D-Mich.), a frequent Fed critic.
Bernanke's confirmation, while hardly in jeopardy, has become a lightning rod for anger on the left and right over the Fed’s handling of the financial meltdown.
The critics’ argument goes like this: If Bernanke and his number crunchers at the Fed really were such whiz kids, they would have seen the whole financial meltdown coming and headed it off. Instead, the economy was teetering on the precipice and required last-minute heroics by the bearded central banker to save it, moves that make some in Congress deeply uncomfortable.
To that end, the timing of Time’s announcement gave critics fodder for the hottest new bipartisan sport: Bernanke-bashing.
“I find it ironic that a man who has spent the last year rewarding others for failure is now being named Person of the Year for his failures. But if Time magazine is in the business of rewarding failure, Ben Bernanke is their man — he has certainly excelled at that” was the verdict from the Senate’s leading Bernanke critic, Jim Bunning (R-Ky.), the sole senator to vote “no” on Bernanke’s first nomination as Fed chairman in 2006.
Vermont independent Sen. Bernie Sanders also found Time’s choice “ironic,” since in the article bestowing the honor, the magazine discusses how Bernanke, like his predecessor, fell asleep at the switch.
“Bernanke was as clueless as [Alan] Greenspan about the coming storm. He dismissed warnings of a housing bubble. He insisted that economic fundamentals remain strong,” Sanders said, quoting the article at a news conference to discuss his attempt to defeat Bernanke’s renomination.
But, forever the contrarian, Paul said he is “delighted” by Time’s choice.
“I think its very, very good that he’s gotten an award to draw the attention to the Federal Reserve, which really should be looked at with a great deal of skepticism because it’s the Federal Reserve that gave us the crisis,” Paul said in an interview.
“The Federal Reserve Board chairman is literally more powerful than the president because he can work in secrecy; he can have arrangements with other foreign governments, with other central banks; he can do all this on his own. ... This to me is very, very significant, and it should be recognized,” Paul said. “I’m delighted that they are at least pointing the finger in the right direction, although their conclusions are completely wrong.”
Continue reading - Few cheers on Capitol Hill for Time's Ben Bernanke pick
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