Ben S. Bernanke > Quotes

“A meritocracy is a system in which the people who are the luckiest in their health and genetic endowment; luckiest in terms of family support, encouragement, and, probably, income; luckiest in their educational and career opportunities; and luckiest in so many other ways difficult to enumerate — these are the folks who reap the largest rewards. The only way for even a putative meritocracy to hope to pass ethical muster, to be considered fair, is if those who are the luckiest in all of those respects also have the greatest responsibility to work hard, to contribute to the betterment of the world, and to share their luck with others.”
― Ben Bernanke

“If we acted, nobody would thank us. But if we did not act, who would? Making politically unpopular decisions for the long-run benefit of the country is the reason the Fed exists as a politically independent central bank. It was created for precisely this purpose: to do what must be done—what others cannot or will not do.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“Barney Frank wanted to know where the Fed was going to get the $85 billion to lend to AIG. I didn’t think this was the time to explain the mechanics of creating bank reserves. I said, “We have $800 billion,” referring to the pre-crisis size of the Fed’s balance sheet. Barney looked stunned. He didn’t see why the Fed should have that kind of money at its disposal.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“They also reminded me of a story Dallas Fed president Richard Fisher included in one of his speeches about the early nineteenth-century French diplomat Talleyrand and his archrival, Prince Metternich of Austria. When Talleyrand died, Metternich was reported to have said, “I wonder what he meant by that?” It seemed that no matter what I said or how plainly I said it, the markets tried to divine some hidden meaning.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“Unlike my predecessor, I intended to use email. To avoid being deluged, I needed a pseudonym. Andy Jester, an IT specialist for the Board, suggested Edward Quince. He had noticed the word “Quince” on a software box and thought “Edward” had a nice ring. It seemed fine to me, so Edward Quince it was. The Board phone book listed him as a member of the security team. The pseudonym remained confidential while I was chairman. Whenever we released my emails—at congressional request or under the Freedom of Information Act, for example—we blacked out the name.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“I had become a Great Depression buff in the way that other people are Civil War buffs, reading not only about the economics of the period but about the politics, sociology, and history as well.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“Economists are criticized for not being able to predict the future, but, because the data are incomplete and subject to revision, we cannot even be sure what happened in the recent past. Noisy data make effective policymaking all the more difficult.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“They believed that anyone who worked hard to feed his or her family, no matter how humble the work, deserved respect.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“If not interest rates or monetary policy, then what? Most research on the origins of the bubble has focused on three factors: mass psychology; financial innovations that reduced the incentive for careful lending;”
― Ben S. Bernanke, 21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19

“You have a neighbor, who smokes in bed. . . . Suppose he sets fire to his house,” I would say later in an interview. “You might say to yourself . . . ‘I’m not gonna call the fire department. Let his house burn down. It’s fine with me.’ But then, of course, what if your house is made of wood? And it’s right next door to his house? What if the whole town is made of wood?”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“If you’ve got a squirt gun in your pocket, you may have to take it out. If you’ve got a bazooka, and people know you’ve got it, you may not have to take it out,” he said. Sometimes market fears can be self-fulfilling, and a strong demonstration can avoid the worst outcomes. I was reminded of the military doctrine of “overwhelming force” as the way to prompt quick surrender and minimize casualties.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“because it takes time to conduct an auction and determine the winning bids, borrowers would receive their funds with a delay, making clear that they were not desperate for cash.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“I think we have to be flexible and creative in the face of what really are extraordinary challenges.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“(The belief that Jews have horns apparently derives from a mistranslation from Hebrew of a verse in Exodus, compounded by a Michelangelo sculpture that portrays Moses with horns.) As I grew older, I became aware that many of my peers, evangelical Christians, believed as a matter of doctrine—if”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“I think he, too, had mixed feelings about the rise of subprime lending.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“Assuming that my words would be taken at face value was my first mistake.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“When the repo agreement comes due, the borrower (a Wall Street investment bank, say, or a hedge fund) can renew, or “roll over,” the loan with the same lender”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“With Bear’s securities as collateral, JPMorgan would then lend the Fed’s cash to Bear.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“setting aside the most volatile prices leads to better predictions of overall inflation.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“By March 2010, we would phase out the auctions completely.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“The goal of macroprudential regulation is to identify and defuse more broad-based risks that may not be evident when looking at individual institutions in isolation.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“Perhaps my low-key approach hurt us politically, but I was not comfortable proceeding in any other way.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“A less experienced and less skilled labor force in turn may worsen Europe’s longer-term growth prospects.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“The senator believed I was doing a good job but, for political reasons, had to vote against me.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“Her instincts were too populist for us to see eye to eye on policy, however,”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“Senator Bernie Sanders of Vermont, a self-described socialist who caucused with the Democrats, seemed to see the world as a vast conspiracy of big corporations and the wealthy. (Corporations and the wealthy have lots of power, certainly, but in the real world most bad things happen because of ignorance, incompetence, or bad luck, not as the result of grand conspiracies.)”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“Geithner’s proposed terms for the loan—which drew heavily on the work of bankers he had asked to explore options for private financing for AIG—included a floating interest rate starting at about 11.5 percent. AIG would also be required to give the government an ownership share of almost 80 percent of the company. Tough terms were appropriate. Given our relative unfamiliarity with the company, the difficulty of valuing AIG FP’s complex derivatives positions, and the extreme conditions we were seeing in financial markets, lending such a large amount inevitably entailed significant risk. Evidently, it was risk that no private-sector firm had been willing to undertake. Taxpayers deserved adequate compensation for bearing that risk. In particular, the requirement that AIG cede a substantial part of its ownership was intended to ensure that taxpayers shared in the gains if the company recovered. Equally important, tough terms helped address the unfairness inherent in aiding AIG and not other firms, while also serving to mitigate the moral hazard arising from the bailout. If executives at similarly situated firms believed they would get easy terms in a government bailout, they would have little incentive to raise capital, reduce risk, or accept market offers for their assets or their company. The Fed and Treasury had pushed for tough terms for the shareholders of Bear Stearns and Fannie and Freddie for precisely these reasons. The political backlash would be intense no matter what we did, but we needed to show that we got taxpayers the best possible deal and had minimized the windfall that the bailout gave to AIG and its shareholders.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“They believed that, given the significance of the decision, I should not have announced the program before the FOMC formally voted.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“I jokingly apologized for causing him so much trouble. He laughed and said that he wished we could have waited a week.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath

“The critics based their argument on the fact that lower interest rates tend to raise prices for assets such as stocks and houses.”
― Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath