Dr. Ben S. Bernanke, Chairman of the Federal Reserve Board of Governors
Ben S. Bernanke, a former professor of Economics and Public Affairs at Princeton University, was chosen to fill the role. He was sworn in on February 1st, 2006, the first new Chairman in almost 20 years. He has been appointed for a four year term ending in 2010, after which he will either step down as Chairman and return to being merely a member of the Board, or shall be reappointed to complete another four year term as Chairman.
Role as Chairman of the Federal Reserve Board
The Federal Reserve is an extremely important position in the world of United States economics. The Federal Reserve supervises and regulates US banks, determines interest rates and controls the amount of currency created or destroyed on a day to day basis.
It is the determination of interest rates which are most commonly watched by investors and the average American. The Federal Reserve sets the Prime Interest Rate, the basic interest rate which is used to charge interest to consumers, borrowers, etc.
After a dramatic cut in interest rates following the recession after the dot.com bubble burst, the Federal Reserve began raising the Prime Interest Rate. In his first months in office Bernanke announced that these rate hikes would soon be coming to an end, causing an almost 200 point jump in the Dow-Jones Index. This demonstrates just how the actions of the Federal Reserve can immediately impact the economic market besides the deeper effects of its interest rate policy and distribution of currency.
The Chairman of the Board of Governors is the most important member of the organization, and it is his policies which most deeply impact the direction in which the Federal Reserve moves.
Bernanke’s Government Career
Beginning in 1985 Bernanke served as professor of economics and public affairs at Princeton University. During his time as professor he also served as a visiting scholar of the Federal Reserve Banks of Philadelphia (1987-89), Boston (1989-90) and New York (1990-91). In 1990 he became a member of the Academic Advisory Panel at the Federal Reserve Bank of New York, a position that ended in 2002 when he was elected as a member of the Board of Governors of the Federal Reserve.
In June of 2005 Bernanke left the Federal Reserve Board to serve as the Chairman of President Bush’s Council of Economic Advisors (CEA). This Council is charged with the task of keeping the President informed on the state of the economy as well as directing him in his economic policies.
Bernanke left the CEA in January of 2006 to rejoin the Board of Governors of the Federal Reserve and to serve as Chairman. His appointment to the Board lasts for 14 years, ending January 31st, 2020.
Bernanke’s Academic Background
Born December 13th, 1953 in Augusta, Georgia, economics were the focus of his adult academic life. After graduating from high school in 1971 enrolled at Harvard University. He received his B.A. in Economics in 1975 (summa cum laude). He received his Ph.D in Economics in 1979 from the Massachusetts Institute of Technology (MIT).
Bernanke has authored a number of scholarly articles and scholarly books on economics. He has also written three textbooks on macroeconomics. His work has concentrated most on the Great Depression and the problem of deflation. He has also given a number of important lectures in different venues on economics. One of his most famous speeches, known as the “printing press speech,” was given in 2002 and deals with the problem of deflation. (Deflation is the opposite of inflation. In a deflating economy money becomes more scarce and prices drop. It is generally associated with a recession or, in extreme cases a long-lasting depression).
In Bernanke’s view, deflation is always avoidable in an economy where money is printed without regard to any tangible standard (such as our own economy). We can always print more money, thus keeping a stable amount of currency in circulation and avoiding the potential problems of deflation.
Among Bernanke’s academic achievements are a Guggenheim Fellowship and a Sloan Fellowship. He is a Fellow of the Econometric Society as well as the American Academy of Arts and Sciences. Bernanke has also served as a member of the National Bureau of Economics Research (NBER), both as a member of the Business Cycle Daying Committee and as Director of the Monetary Economics Program.
Ben S. Bernanke, Chairman of the Federal Reserve Board of Governors
With an impressive background in economics, Ben Bernanke was chosen to follow the most influential Federal Reserve Chairman in its near 100 year history. Greenspan led the economy through the greatest single day stock market point loss in history, recession, the dot.com boom of the 90’s, terrorist attacks and the following recession. What shall Ben Bernanke have to lead the country’s economy through? How shall he serve as Chairman? Only time will tell.
