Monday, November 14, 2005
On Monday, Oct. 24, 2005, President Bush nominated Ben S. Bernanke, chairman of the president's Council of Economic Advisers, to succeed Federal Reserve Chairman Alan Greenspan when he retires in January. Read the complete text of the president's announcement of the nomination.Biography:
WASHINGTON -- Five years ago, Ben Bernanke posed the prescient question in an op-ed in The Wall Street Journal, "What Happens When Greenspan is Gone?"
President Bush answered on Monday: Replace Federal Reserve Chairman Alan Greenspan with Bernanke, a straight-talking Ivy League economist with a reputation for eschewing political ideology.
In the world of economic theory and policy, Bernanke, 51, has espoused targeting inflation, stressed the importance of communication and transparency by the Fed and argued that the final say on debts and deficits lies with the president and Congress.
Born in Georgia and raised in Dillon, S.C., Bernanke was an academic star. In sixth grade, he won the state spelling bee but missed higher acclaim when he faltered on the word "edelweiss," a flower. He got a score of 1,590 on his SAT out of a possible 1,600, taught himself calculus in high school and then focused on economic numbers at Harvard.
After graduating summa cum laude from the Ivy League university in 1975, Bernanke continued his studies at the Massachusetts Institute of Technology, where he received his doctorate four years later. His focus during his years in Boston were the underpinnings of the Great Depression and the losing ways of the city's beloved baseball team, the Red Sox.
The former was his field of study; the latter an obsession he eventually shed. A Washingtonian of late, Bernanke recently switched his allegiance to the capital's baseball team, the Nationals.
He was an economics professor at Stanford and chaired the department at Princeton.
When he was sworn in as chairman of the president's Council of Economic Advisers in June, Bernanke was serving on the board of governors of the Federal Reserve System.
He has written numerous books and articles, some focusing on his idea of targeting inflation, in other words coming up with a specific level -- around 2 percent -- over a specific time period -- about two years.
It was a theory he put forth in his Wall Street Journal editorial looking beyond Greenspan, which he wrote along with Frederic S. Mishkin and Adam S. Posen:
"The Fed needs an approach that consolidates the gains of the Greenspan years and ensures that those successful policies will continue -- even if future Fed chairmen are less skillful or less committed to price stability than Mr. Greenspan has been."
(Source: Associated Press)Reactions to Bernanke nomination:
"Ben Bernanke is the right man to build on the record Alan Greenspan has established." -- President George W. Bush
"The president has made a distinguished appointment in Ben Bernanke. Ben comes with superb academic credentials and important insights into the ways our economy functions. I have no doubt that he will be a credit to the nation as chairman of the Federal Reserve Board." -- Alan Greenspan, chairman of the Federal Reserve
"I am hopeful that Dr. Bernanke will provide the steady hand our nation needs to continue to grow the economy and recover and rebuild from the recent Gulf Coast hurricanes. If confirmed, he follows in the footsteps of the able Alan Greenspan, whose leadership has helped guide America's economic policy for 18 years now. This is an important job. By moving so quickly to nominate Chairman Greenspan's successor, President Bush is showing that strengthening the economy so that Americans can have better jobs and better lives is a priority for us all. I urge the Senate to move quickly to give this nomination an up or down vote." -- House Speaker Dennis Hastert of Illinois
"I believe he will monitor and implement U.S. monetary policy that will ensure a strong domestic economy and maintain America's global competitiveness." -- Senate Republican Leader Bill Frist of Tennessee
"It will be important that Mr. Bernanke demonstrate that he is committed to guiding the economy to produce results for all Americans rather than promoting partisan policies that benefit special interests and an elite few." -- Senate Democratic Leader Harry Reid of Nevada
"I am confident that this nominee will be thoroughly questioned but also well-received by all members of our committee." -- Sen. Richard Shelby (R-Ala.), chairman of the Senate Banking Committee
"We need a careful, non-ideological person who understands that the Federal Reserve's main job is to fight inflation and Ben Bernanke seems to fit that bill." -- Sen. Charles Schumer (D-N.Y.), highest-ranking Democrat on the Senate Banking Committee
"His previous service on the Fed's board of governors under Greenspan has provided him invaluable preparation for this critical role and his steady hand and solid judgment should serve our financial markets well." -- Marc Lackritz, president, Securities Industry Association
"Chairman Greenspan's success was that people had confidence in him. .... Now, the most important thing for Ben Bernanke to do is to build on that confidence and that credibility. " -- Sen. Chuck Grassley (R-Iowa), chairman of the Senate Committee on Finance
"We need an independent voice, free from political influence and interference, who will speak the truth to policy-makers in Washington. At a time when the number of Americans without health insurance, gas prices and education costs are skyrocketing, and wages aren't keeping pace, it's time for some common sense." -- Sen. John Kerry (D-Mass.)For further reading: