A New Money Man; Ben Bernanke Has a Tough Act to Follow as Fed Chairman

Newsweek, November 7, 2005 | Go to article overview

A New Money Man; Ben Bernanke Has a Tough Act to Follow as Fed Chairman


Byline: Daniel McGinn and Richard Wolffe (With Holly Bailey)

When Ben Bernanke left his post at the Federal Reserve last spring to become President George W. Bush's top economic adviser, his work pals didn't give him much of a send-off. Only a month ago did his Fed colleagues get around to throwing him a lunchtime goodbye party. In keeping with Fed tradition, Bernanke's favorite food--Necco candy wafers--was served, and the going-away gifts included a Steuben crystal eagle, a framed set of dollar bills and the chair Bernanke sat in during Fed meetings. This winter, however, Bernanke will need to deliver that chair back to the Fed--and perhaps return the going-away presents, too. After months of oddsmaking from Washington to Wall Street about who would succeed Federal Reserve chairman Alan Greenspan, 79, when his term expires in January, last week Greenspan and Bernanke strode into the Oval Office for the announcement. After 18 years leading the Fed, the man known as the Maestro will finally turn over his baton.

Economists applauded the choice, the stock market rose, and even in partisan Washington, it was hard to find anyone who disapproved. That's partly because of Bernanke's stellar credentials, which drew immediate comparisons to the choice of John Roberts for the Supreme Court. In academic circles, Bernanke is regarded as a superstar; at the White House, he won favor by not talking down to the president, as economists sometimes do. Bernanke's other advantages: he's been confirmed by the Senate for three prior jobs, and he's so moderate politically (or discreet) that close colleagues claimed to have no idea whether he's a Democrat or, as it turned out, a Republican.

The chairman-designate was raised in rural South Carolina. As a teenager he worked briefly as a waiter at the South of the Border tourist trap on Interstate 95. Early on, says his father, Philip, the town's pharmacist, it was clear "he was destined for something greater than a small-town drugstore." At Harvard he discovered economics and spent hours at a mainframe computer, tinkering with natural-gas pricing models for his senior thesis. His adviser, Harvard economist Dale Jorgenson, notes the irony: when Jorgenson visited the Fed last month, natural-gas pricing was again a hot topic. As a doctoral student at MIT in the late 1970s, Bernanke became focused on the causes of the Great Depression. After earning his Ph.D., he continued that research for a decade. "I guess I am a Great Depression buff, the way some people are Civil War buffs," he later wrote. "To understand the Great Depression is the Holy Grail of macroeconomics."

It's also great preparation for running a central bank. That's partly why, after long stints as a professor at Stanford and Princeton, he was tapped in 2002 by the Bush administration to serve as one of seven Federal Reserve governors. There, as Greenspan & Co. furiously cut interest rates in the wake of the dot-com crash, Bernanke began speaking out about a different concern: deflation. As the Fed moved short-term rates toward 1 percent--a historic low--Bernanke worried that if the economy slowed and prices began falling, the United States might encounter the stagnation faced by Japan in the 1990s. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

A New Money Man; Ben Bernanke Has a Tough Act to Follow as Fed Chairman
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.