Bernanke says mistakes were made, but Fed policy stopped economic collapse
05/19/2014 6:16 PM
05/19/2014 6:17 PM
Ben Bernanke, who led the Federal Reserve during the 2008 economic crisis, said Monday that his upcoming book will give him the chance to look at the decisions he made and also serve as “therapy.”
“I think that more than just selling a book, I think I’m really interested in the personal therapy here,” the former Fed chairman said Monday at a conference on monetary policy hosted by former President George W. Bush’s policy institute in Dallas. “I really want to go back and think through all these decisions and recognizing that many of them were made under very tight timelines under very difficult circumstances, try to understand where we did the right thing, where we made mistakes, try to really come to grips with all of this.
“I think we did make a lot of progress,” Bernanke said. “I think we made the system a lot more transparent. I think we did avoid the collapse of the financial system, which obviously would have been a terrible outcome. Were there mistakes? Absolutely. I’m going to try in my own writing and thinking to understand for myself what they were. But I’m sure plenty of others already have opinions.”
His as-yet-untitled book, set for release next year, will cover his years at the Fed and his response to the 2008 economic crisis.
Bernanke stepped down in January after eight years as Fed chairman. He started his career at the Fed in 2002, when he joined the board of governors. He was appointed chairman in 2006 by Bush, a Republican, and reappointed four years later by President Barack Obama, a Democrat.
In a conversation with Bush’s former White House chief of staff Josh Bolten at the George W. Bush Institute on the campus of Southern Methodist University, Bernanke said he would like the history books to say he “did the best he could in tough circumstances.”
“It’s really hard now to remember how black the situation was in October of 2008,” Bernanke said.
Bush also spoke at the conference and recalled a meeting with Bernanke during the financial crisis.
“He says, ‘You better do something or otherwise we’ll be headed for a Great Depression.’ Pretty sobering words for a president to hear. And so the first thought that should cross anybody’s mind is: Do you trust the person saying we could be headed for a Great Depression? … Is the judgment of the person issuing those words worthy of listening to? In Ben Bernanke’s case, they were worthy of listening to,” he said, adding that Bernanke was “cool under fire.”
Bernanke said it’s important to remember that the Federal Reserve and monetary policy are not a “panacea.”
“Relying on the Fed to take care of all these problems — income distribution, long-term growth, the fact that the Nationals are only in second place, all that — the Fed cannot do all those things. If people are concerned about these distributional issues, we’ve got educational policy, we’ve got immigration policy, we’ve got [job] training policy. There’s lots of stuff that can be done in Washington to address these issues,” Bernanke said.
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