Dec 3, 2008
NEW YORKER on Bernanke
The latest issue of THE NEW YORKER (Dec 1, 2008) has an interesting profile of Ben Bernanke by John Cassidy: .
Although Cassidy tries to survey Bernanke's responses to the current crisis, it is clear Cassidy is a little beyond his depth. He misses completely what financial developments caused Bernanke to hit the panic button after September 17, as well as the extent to which Bernanke then amped up Fed policy.
But the profile has a chilling ending, when Cassidy reports that"Bernanke, in a search for inspiration and guidance, has been thinking about two Presidents": not only F.D.R., as already widely reported, but even worse, Abraham Lincoln. Let me quote in full:
"From the former he took the notion that what policymakers needed in a crisis was flexibility and resolve. After assuming office, in March, 1933, Roosevelt enacted bold measures aimed at reviving the moribund economy: a banking holiday, deposit insurance, expanded public works, a devaluation of the dollar, price controls, the imposition of production directives on many industries. Some of the measures worked; some may have delayed a rebound. But they gave the American people hope, because they were decisive actions.
"Bernanke's knowledge of Lincoln was more limited, but one morning the man who organizes the parking pool in the basement of the Fed's headquarters had given him a copy of a statement Lincoln made in 1862, after he was criticized by Congress for military blunders during the Civil War: 'If I were to try to read, much less answer, all the attacks made on me, this shop might as well be closed for any other business. I do the very best I know how the very best I can; and I mean to keep doing so until the end. If the end brings me out all right, what is said against me won't amount to anything. If the end brings me out wrong, ten angels swearing I was right will make no difference.'
"Bernanke keeps the statement on his desk, so he can refer to it when necessary."
Although Cassidy tries to survey Bernanke's responses to the current crisis, it is clear Cassidy is a little beyond his depth. He misses completely what financial developments caused Bernanke to hit the panic button after September 17, as well as the extent to which Bernanke then amped up Fed policy.
But the profile has a chilling ending, when Cassidy reports that"Bernanke, in a search for inspiration and guidance, has been thinking about two Presidents": not only F.D.R., as already widely reported, but even worse, Abraham Lincoln. Let me quote in full:
"From the former he took the notion that what policymakers needed in a crisis was flexibility and resolve. After assuming office, in March, 1933, Roosevelt enacted bold measures aimed at reviving the moribund economy: a banking holiday, deposit insurance, expanded public works, a devaluation of the dollar, price controls, the imposition of production directives on many industries. Some of the measures worked; some may have delayed a rebound. But they gave the American people hope, because they were decisive actions.
"Bernanke's knowledge of Lincoln was more limited, but one morning the man who organizes the parking pool in the basement of the Fed's headquarters had given him a copy of a statement Lincoln made in 1862, after he was criticized by Congress for military blunders during the Civil War: 'If I were to try to read, much less answer, all the attacks made on me, this shop might as well be closed for any other business. I do the very best I know how the very best I can; and I mean to keep doing so until the end. If the end brings me out all right, what is said against me won't amount to anything. If the end brings me out wrong, ten angels swearing I was right will make no difference.'
"Bernanke keeps the statement on his desk, so he can refer to it when necessary."