Ben Bernanke

In November 2002, Ben Bernanke apologized--for the Fed's role in causing the Great Depression of the 1930s. "I would like to say to Milton [Friedman] and Anna [Schwartz]: Regarding the Great Depression. You're right, we did it. We're very sorry.

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My esteemed colleague Noam Scheiber cites today’s report from the Wall Street Journal about Secretary of the Treasury Tim Geithner blowing his top at the heads of the various financial agencies, including the Federal Reserve, for quarreling over who will have jurisdiction for regulating different financial services.  Interestingly, Geithner is reported to have chastised the FDIC’s Sheila Bair and SEC chairwoman Mary Schapiro for objecting to the administration’s plan to vest most regulatory functions in the Federal Reserve.  Geithner is not reported to have bawled out Fed chairman Ben Bernanke

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Like the Times' Edmund Andrews, I think Ben Bernanke has done an impressive job defending and demystifying the Fed's actions for average voters at a time that's pretty ripe for a populist anti-Fed backlash. (Among other things, Ron Paul's efforts to subject the Fed's conduct of monetary policy to periodic audits would be an absolute disaster were it to come to pass--you can quibble with the bank bailouts, but almost no one thinks Bernanke mishandled the setting of interest rates during the financial crisis.

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The Journal just posted a piece about the White House thought process as it weighs whether or not to reappoint Ben Bernanke. The piece had this to say about the leading candidates to replace him if the decision is "not" (besides Larry Summers, who's widely presumed to be the frontrunner): Before making a decision later this year, the White House also is expected to look at other economists, including Roger Ferguson and Alan Blinder, former Fed vice chairmen; Janet Yellen, president of the San Francisco Federal Reserve Bank; and Christina Romer, chairman of Mr.

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It's that time again--the G8 ministers of finance get together for another face-to-face conversation, this time in Italy over the coming weekend. (Aside: the central organization at work is actually the G7, but the Russians get to join when the ministerial meeting is ahead of the annual G8 heads of government meeting). The G7, which first convened in the 1970s to guide the global economy after the breakup of the Bretton Woods fixed exchange rate system, seems increasingly irrelevant (and adding Russia, after the collapse of communism, added little).

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My colleague John Judis e-mailed yesterday after Ben Bernanke's Hill testimony worried that the Fed chairman was trying to mau-mau the administration into tightening the money spigots prematurely, possibly triggering a 1937-style economic relapse. It was comments like these in particular that had John worried: [I]n recent weeks, yields on longer-term Treasury securities and fixed-rate mortgages have risen. These increases appear to reflect concerns about large federal deficits but also other causes...

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Test Anxiety

What the banks still won't tell us.

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Almost four months after his inauguration, President Barack Obama is still riding high in the polls. According to Gallup, 66 percent of Americans approve of the job he is doing. But I expect that Obama’s popularity will begin to fall, even plummet, as the leaves turn brown.

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The big story yesterday (and into today) was that Hank Paulson and Ben Bernanke basically forced Bank of America to go ahead with its merger with Merrill even after BofA realized it would be on the hook for over $15 billion in Merrill losses. The two officials also seem to have pressured BofA CEO Ken Lewis to keep quiet about the losses (or at least gave him the strong impression it was in his interest to do so) so that his shareholders wouldn't torpedo the deal.

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I don't entirely understand this Washington Post op-ed from Simon Johnson and James Kwak. On the one hand, they seem to criticize Fed Chairman Ben Bernanke for a series of radical moves designed to prevent a deflationary spiral. "Bernanke's willingness to pump money into the economy risks unleashing the most serious bout of U.S. inflation since the early 1980s, in a nation already battered by rising unemployment and negative growth," they write.

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