Ben Bernanke
36 quotes
Biography
"It's the price of success: people start to think you're omnipotent."
"There’s no denying that a collapse in stock prices today would pose serious macroeconomic challenges for the United States. Consumer spending would slow, and the U.S. economy would become less of a magnet for foreign investors. Economic growth, which in any case has recently been at unsustainable levels, would decline somewhat. History proves, however, that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse."
"The economic repercussions of a stock market crash depend less on the severity of the crash itself than on the response of economic policymakers, particularly central bankers."
"House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas."
"To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above."
"Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much. However, careful economic analysis does have one important benefit, which is that it can help kill ideas that are completely logically inconsistent or wildly at variance with the data. This insight covers at least 90 percent of proposed economic policies."
"It was a global depression, had many causes, the whole story requires you to look at the whole international system. But policy errors in United States, as well as abroad, did play an important role. And in particular as I said, the Federal Reserve failed in this first challenge in both parts of its mission. It did not use monetary policy aggressively to prevent deflation and the collapse in the economy, so it failed in its economic stability function. And it didn't adequately perform its function as lender of last resort allowing many bank failures and a resulting contraction in credit and also with the money supply. So, in that respect, again, the Fed did not fulfill its intended mission."
"We did stop the meltdown. We avoided what would have been, I think, a collapse of the global financial system. That was obviously a good thing. But one thing that I was always sure of and the Federal Reserve was always sure of was that a collapse of some of these big financial firms was going to have very serious collateral consequences. There were people arguing even as late as September 2008, “Well, why don't you just let the firms collapse? There is a system that can take care of it: bankruptcy. Why don't you let them fail?” We never thought that was a good option. Particularly, if the whole system had collapsed, we would have had extraordinarily serious consequences."
"Obviously, based on the crisis and what happened and the effects that we're still feeling, it's now clear that maintaining financial stability is just as an important a responsibility as monetary and economic stability. And indeed, this is, you know, very much a return to the—where the Fed came from in the beginning. Remember the reason that Fed was created was to try to reduce the incidents of financial panics, so financial stability was the original goal of creation of the Fed. So now we sort of come full circle."
"For nearly eight years, Ben has led the Fed through some of the most daunting economic challenges of our lifetime. . . . [W]hen faced with a potential global economic meltdown, he has displayed tremendous courage and creativity. He took bold action that was needed to avert another Depression - helping us stop the free fall, stabilize financial markets, shore up our banks, get credit flowing again. And all this has made a profound difference in the lives of millions of Americans. . . . [Now] more families are able to afford their own home; more small businesses are able to get loans to expand and hire workers; more folks can pay their mortgages and their car loans. It’s meant more growth and more jobs."
"Federal Reserve System"
"New Keynesian economics"
"In the future, my communications with the public and with the markets will be entirely through regular and formal channels."
"In many spheres of human endeavor, from science to business to education to economic policy, good decisions depend on good measurement."
"Given the extent of the exposures of major banks around the world to A.I.G., and in light of the extreme fragility of the system, there was a significant risk that A.I.G.'s failure could have sparked a global banking panic."
"In the future, financial firms of any type whose failure would pose a systemic risk must accept especially close regulatory scrutiny of their risk-taking."
"The failure of Lehman Brothers demonstrated that liquidity provision by the Federal Reserve would not be sufficient to stop the crisis substantial fiscal resources were necessary."
"High levels of homeownership have been shown to foster greater involvement in school and civic organizations, higher graduation rates, and greater neighborhood stability."
"No economy can succeed without a high-quality workforce, particularly in an age of globalization and technical change."
"Community development has a long history of innovation and learning from experience."
"The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis."
"The more guidance a central bank can provide the public about how policy is likely to evolve the greater the chance that market participants will make appropriate inferences."
"People saw the Depression as a necessary thing - a chance to squeeze out the excesses, get back to Puritan morality. That just made things worse."
"Economics has many substantive areas of knowledge where there is agreement, but also contains areas of controversy. That's inescapable."
"As an educator myself, I understand the profound effect that good teachers and a quality education have on the lives of our young people."