Tuesday, November 15, 2005
In the early 1970s, when college for many meant antiwar protests and experimenting with recreational drugs, friends say Ben S. Bernanke was busy at Harvard and MIT trying to figure out the monetary causes of the Great Depression.
Now the shy, bearded, 51-year-old academic is President Bush's nominee for chairman of the Federal Reserve, anointed successor to celebrated central banker and cultural icon Alan Greenspan.
The public will get its first extended look at the little-known Bernanke today, when he sits for questions from members of the Senate Banking Committee at his one-day confirmation hearing. If confirmed, Bernanke will take over the Fed at a moment of rising economic unease. The U.S. trade and budget deficits are soaring. The once-blistering housing market may be cooling. Rumors continue to rumble through Wall Street of dangerously overextended hedge funds ripe for collapse. The next Fed chairman could face significant challenges, as Greenspan did, within months of taking office.
Bernanke's friends, colleagues and former students say the would-be Fed chairman is likely to come across in the hearing as anything but a starchy academic wedded to arcane theories and rigid economic models.
Instead, they describe Bernanke as a supple thinker and a deceptively shrewd politician with a deadpan wit, a deeply calming bedside manner and no strident political or economic ideology.
Those traits came in handy during his years as chairman of Princeton University's economics department. Bernanke took over a bickering department in 1996 and turned it into a smoothly running machine now often mentioned as one of the top two or three in the nation. Colleagues said Bernanke always knew where each faculty member stood on any issue before a department meeting, something also said to be true of Greenspan at the Fed, an institution that seeks to operate by consensus.
Yet, while reminiscing about his years as department head, Bernanke did not take the position -- or himself -- too seriously. "I served seven years as the chair of the Princeton economics department," Bernanke recalled in a January speech, "where I had responsibility for major policy decisions, such as whether to serve bagels or doughnuts at the department coffee hour."
Ben Shalom Bernanke was born Dec. 13, 1953, in Augusta, Ga., and grew up in Dillon, S.C., a small farming and furniture manufacturing community just over the North Carolina border. His mother, Edna, was a substitute teacher. His father, Philip, was a pharmacist at the Jay Bee Drug Co., a store founded by Philip's father, Jonas, who moved to South Carolina from New York in search of a quieter life.
Edna Bernanke said she noticed early that her eldest son had a knack for numbers and an apparent fondness for currency. "We came home one time, and he was playing with pennies with someone," Bernanke said of her 3-year old son. "He could add and subtract. You'd say, 'What if I had nine pennies and I take away three?' and he'd tell you right away."
Bernanke finished 26th at the national spelling bee in Washington, dropping out on the word "edelweiss." Edna Bernanke said her son faltered because he had not yet seen "The Sound of Music," which popularized the word. "We didn't have too many movies in Dillon," she said.
In high school, Bernanke scored 1,590 on his SAT, a near-perfect score. He taught himself calculus as a senior because his school did not offer the course, and he became a speed reader. But Bernanke didn't spend all his time in the library -- his high school afternoons were divided between band practice (he played the saxophone, as did Greenspan) or shooting hoops with friends in his back yard. The schools in Dillon were just starting to integrate, and the young Bernanke drafted a novel about top white and black football players coming together to form a team at a new high school.