Dick Berner didn’t foresee the 2008 financial crisis. But he was among the first to predict the economic downturn that led up to it. In late 2007, as an economist at Morgan Stanley, Berman forecast a recession in 2008 due to a significant housing slump, a weakening job market and higher energy costs while most other major financial firms were still sanguine about the economy’s prospects (you can see him interviewed on “Charlie Rose” here). President Obama has now chosen Berner to become the government’s oracle for the U.S. financial system, charged with foreseeing the next big threat before catastrophe comes down the pipe.
Berner’s private-sector background might help him win over some Republicans during the nomination process. He was a 2009 stimulus skeptic who believes that the Obama administration didn’t take all the right steps to resolve the housing crisis. But as with the more controversial Consumer Financial Protection Bureau, GOP resistance will likely focus on the existence of the Office of Financial Research itself, which one House Republican described as “Orwellian” in nature for its access to private firms’ information and concerns about privacy.
Berner, of course, hasn’t always been on the mark with his forecasts. In 2010, as chief economist at Morgan Stanley, he made some overly optimistic predictions about GDP growth for late 2010 and 2011, bullish that credit would loosen and employers would begin hiring again. Some people “think I’m out of my mind. But I have a conviction in my beliefs that’s based on my analysis,” he told the New York Times in 2010. But Berner also warned around the same time that Greece’s debt crisis was a serious concern and a threat to European stability.