Sunday, August 25, 2013

Ben Bernanke - The Audacious Pragmatist

It has been easy to take shots at the Federal Reserve – they probably take the same abuse from the public as baseball managers. The Fed is constantly being second guessed. And after I let others wail away on the Federal Reserve in the last blog posted, it is only fair to offer an opportunity to learn more about the Fed.

Helping me out was The New York Times, who on Sunday, August 25, 2013 ran an article about Federal Reserve Chair, Ben Bernanke, titled The Audacious Pragmatist  ( And as the name of the article states, Ben Bernank has been a pragmatist since the finance crisis of 2008.  


Ben Bernanke (from The New York Times)
The NYT wrote, “Mr. Bernanke, who plans to step down in January after eight years as Fed chairman, will be remembered for helping to arrest the collapse of the financial system in 2008. This shy, methodical economist who had been expected to serve as the keeper of Alan Greenspan’s flame — to preserve the Fed’s hard-won success in moderating inflation — emerged under pressure as perhaps the most innovative and daring leader in the Fed’s history.

But what Mr. Bernanke did after the crisis may prove to have even more enduring influence. For almost three decades, the Fed focused on moderating inflation in the belief that this was the best and only way to help the economy. In the wake of the crisis, Mr. Bernanke forged a broader vision of the Fed’s responsibilities, starting experimental, incomplete campaigns to reduce unemployment and to prevent future crises.” 

The article – which is well worth reading – helps put into perspective the enormous challenges faced during and after the 2008 financial crisis. I believe history will treat Ben Bernanke as one of the heroes of the early 21st century. While not beloved during his tenure, we’ll eventually see that the Fed’s intentions were good and that they responded in a pragmatic manner, as opposed to staunch idealism or bowing to political pressures.

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