Chief Economist and current Chairman of the Federal Reserve and Central Bank of the United States, Ben Shalom Bernanke was appointed by President George W. Bush on February 1, 2006. Bernanke succeeded longtime Fed Chairman Alan Greenspan and was credited by President Obama as having the background, temperament, courage and creativity to help prevent another Great Depression in 2008.
Born From Humble American Beginnings
Ben S. Bernanke was born on December 13, 1953 in North Augusta, South Carolina, but spent most of his childhood and teen years in Dillon, SC. He was raised in a middle class environment by his father Philip, a pharmacist and his mother, Edna a elementary schoolteacher. Bernanke was the eldest of three children - one brother and one sister.
Throughout his teen years Bernanke learned the value of hard work and the dollar. He often helped out at the family’s drug store and then worked in construction at a local hospital. To support himself during his undergraduate college years, Bernanke waited tables at nearby attraction, “South of the Border.”
Bernanke put the similar “can do” effort into his studies as he did at work. He was class valedictorian at Dillon High School and achieved a near-perfect score on his SATs--1590 out of 1600.
Grades and test scores earned Bernanke a place at prestigious Harvard University where he graduated summa cum laude in 1975 with a Bachelor of Arts in Economics. He pursued his Doctor of Philosophy in Economics from the Massachusetts Institute of Technology (MIT) in 1979, which is where he wrote his thesis entitled, “Long-Term Commitments, Dynamic Optimization, and the Business Cycle.”
Early Background in Academia and the Fed
Upon graduating from MIT, Bernanke taught at the Stanford Graduate School of Business from 1979 until 1985. He was also a visiting professor at New York University and became a tenured professor at Princeton University in the Department of Economics.
At Princeton, Bernanke became department chair from 1996 until September 2002, when he took a seat to serve as a member of the Board of Governors of the Federal Reserve System. He served on the board from 2002 until 2005.
During his time as a Governor, he delivered a famous speech, "Deflation: Making Sure It Doesn't Happen Here," which became the outline to the Bernanke Doctrine.
Chairman of the Federal Reserve
President George W. Bush nominated Bernanke to assume the role of Fed Chairman and succeed Alan Greenspan. Bernanke officially took over the position on February 1, 2006.
Although Bernanke was expected to follow the same fiscal management policies set forth by Greenspan, he was also appointed to make impactful changes to inflation.
While Greenspan rejected inflation targeting, Bernanke believed that a stated inflation objective would stimulate economic growth and stability.
Bernanke, President Bush and the Secretary of the U.S. Treasury, Henry Paulson drafted the Emergency Economic Stabilization Act in September 2008, which was designed to protect the U.S. financial markets during a subprime mortgage crisis.
On August 25, 2009, President Obama nominated Bernanke for a second term as Fed Chairman and he was narrowly confirmed on January 28, 2010.
Although credited with helping the country avert another Great Depression, Bernanke’s decisions did not come without controversy. The New York Times said that Bernanke "has been attacked for failing to foresee the financial crisis, for bailing out Wall Street, and, most recently, for injecting an additional $600 billion into the banking system to give the slow recovery a boost."
New York State Attorney General Andrew Cuomo sent a letter to Congress dated April 23, 2009 alleging that Bernanke and former Treasury Secretary Henry Paulson were involved in fraudulent activities pertaining to the Merrill Lynch/Bank of America acquisition. Cuomo’s letter says that Bernanke and Paulson did not disclose the extent of Merrill Lynch’s losses to Bank of America.
Congressional hearings took place on June 25, 2009 where Bernanke stated that he did nothing wrong. "I never said anything about firing the board and the management of Bank of America," Bernanke insisted.
In 2010, an anonymous whistleblower claimed to have “'troubling details' of Bernanke's role in the AIG bailout." Senator Jim Bunning told CNBC he saw documents that clearly show that Bernanke overruled staff recommendations pertaining to the AIG bailout. However, Senators who support Bernanke have expressed their opinion that his actions averted worse problems.
Awards and Honors
Bernanke has received numerous accolades and held prestigious positions throughout his career. In addition to penning numerous scholarly books and textbooks, Bernanke held the Guggenheim Fellowship and a Sloan Fellowship. He is a Fellow of the Econometric Society and the American Academy of Arts and Sciences.
Bernanke served as the Director of the Monetary Economics Program of the National Bureau of Economics Research (NBER) and is a member of the NBER’s Business Cycle Dating Committee.
In 2009, the South Carolina Department of Transportation (SCDOT) Commission named Exit 190 along Interstate Highway 95 in Dillon County to be the Ben Bernanke Interchange. Time Magazine named Bernanke as it’s infamous “Person of the Year” in 2009.