The Nobel Committee has announced the winners of the 2022 Nobel Prize in Economics. One of the three winners is Ben S. Bernanke, the eldest son of a middle-class Jewish family. So who is Bernanke, the former Fed Chairman?
Ben Bernanke, once the No. 1 man of the Federal Reserve, is known as the 'Great Depression expert' for analyzing the 1929 economic crisis well and drawing important lessons. Bernanke, with his critical moves, has a great share in weakening the effects of the global economic crisis in 2008.
Ben Shalom Bernanke (born December 13, 1953) is an American economist who served as the 14th chairman of the Federal Reserve from 2006 to 2014. After leaving the Fed, he was appointed a distinguished fellow at the Brookings Institution.
He was named "Man of the Year" by Time Magazine in 2010.
The magazine used the following statements while describing Bernanke: “He doesn't have a very impressive appearance. Not an impressive speaker. Nor does he have the usual "look at me" or "listen to me" charisma among the men who oversee Washington offices. To date, he has not been seen to engage in a biased or ideological discussion. However, he didn't feel like he knew anything about things he didn't know. Since he spent most of his career as a professor, he acts more like a professor than a professional.”
How did Bernanke suddenly become the most powerful person in the world despite all these features?
FROM MEDIUM CLASS RELIGIOUS FAMILY TO THE TOP
Ben Shalom Bernanke was born on December 13, 1953, in Georgia, USA, as the eldest of three children. The Bernanke family was one of the few Jewish families in the area, attending a local synagogue called Ohav Shalom. As a child, Bernanke learned Hebrew from his grandfather, Harold Friedman, who was a cantor, shohet, and Hebrew teacher. He worked in summers to earn money during his school years. He feared that if his family entered Harvard, Bernanke would lose his Jewish identity. But a black friend, who would later become a professor at MIT, convinced the Bernanke family that there were also Jews in Boston. Since calculus was not taught in high school, Bernanke learned by self-study. He scored 1590 out of 1600 in the SAT, which is the university admissions exam. He completed his doctorate at MIT in 1979.
After teaching at the Stanford School of Business from 1979 to 1985, Bernanke became a visiting lecturer at New York University. Bernanke, who later became a professor at Princeton University, served as dean of the university's economics faculty from 1996 to 2002. He resigned from his position at Princeton University on July 1, 2005.
FED PRESIDENCY
Bernanke was a member of the Fed's Board of Governors from 2002 to 2005. From June 2005 to January 2006, he chaired the Council of Economic Advisers to the President of the United States. On February 1, 2006, he was appointed as the chairman of the Fed. In 2007-2008, he chaired the Fed during one of the biggest crises of the last 75 years, which shook the country's economy and therefore the world economy. After Barack Obama took over the administration, it was talked about that he would hand over the chairmanship of the Fed to Larry Summers, one of Obama's current economic advisers, but it was decided that he would continue in his second term. Some of the reasons for the criticism directed at Bernanke in his first term are the increased unemployment after the crisis and the FED's inability to regulate the banks before the economic crisis. Bernanke's actions are especially criticized by Democrats. Robert Kuttner, one of the important members of the Democrats; He accused Bernanke of missing the crisis signals in 2006 and 2007. According to Yves Smith, president of the American company Aurora Advisors, in addition to contributing to the biggest crisis since the Great Depression, Bernanke's defense is that his activities prevented the crisis from getting worse. According to Smith, it's a mistake to hire someone underperforming in a far more important position while unsuccessful CEOs are fired.
In the news of the Marketwatch stock site, Bernanke, who decided to continue as Fed Chairman, said, "Bernanke, who analyzed the Great Depression very well, prevented the same mistakes from being made again and protected both the USA and the world from a great disaster. The millions of investors who have multiplied the value of their investments since the lows on March 9 should also thank Bernanke.”
GREAT DEEP EXPERT
Princeton Professor Bernanke was a leading expert on the Great Depression. He knew how the passive Fed of the 1930s had helped to create disaster, by his stubborn refusal to increase the money supply, and by his lack of imagination and experience. Bernanke would not allow the second depression. So when the turmoil in the US real estate markets turned into the world's biggest financial crisis in 75 years, it demanded trillions of dollars and sprayed it into the economy.
Led the public bailout of ailing private companies, drove interest rates near zero, lent to mutual funds, hedge funds, foreign banks, investment bankers, manufacturers, insurers, and other institutions that couldn't imagine getting cash from the Fed, tripling the Fed's balance sheet It has not only reshaped US fiscal policy, it has saved the world economy.
Bernanke knew that the economy would have gotten much worse if the Fed didn't take action to stop this extreme panic. Ten percent, which is currently the unemployment rate in the United States; It's a high number, but the difference between 10 and 25 percent is huge. There is also a big difference between anemic and negative growth.
Bernanke believes that helping save the irresponsible giants on Wall Street is "to save the people on Main Street," and he hopes the Americans will understand. He knows better than anyone how financial crises can turn into global crises and states that they are very close to depression and that the markets are in shock. He is not happy with where he is, but says it could be much worse.