Ben Bernanke Quotes
The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately in the absence of countervailing monetary policy action to further upward pressure on inflation.
Bernanke, Ben S. "Semiannual Monetary Policy Report to the Congress." Committee on Banking, Housing, and Urban Affairs, U.S. Senate, 14 Feb. 2007.
This is the equivalent of “if you build it, they will come.” This is one of those so called “Law” of economics that is really not always so. In many cases it holds, as when Disney Built Disney World or Apple issued the iPhone. However, it clearly does not hold when there is a surplus of a commodity.
The “Fed Note” was the term for a Federal Reserve Note. It was a then a new form of paper money issued by the Federal Reserve Banks instead of the Treasury department as the previous United States Notes had been. The United States was a guarantor of the Federal Reserve Notes in case the Federal Reserve defaulted and there were many who feared having the responsibility to back up the Federal Reserve notes which could be issued by the Federal Reserve Banks—not government entities and not under the control of the President or Congress.
Many people think that as a New Deal Democrat, she did not consider inflation as a major problem. However, she did, and this is but one example.
Born thought that her agency was responsible for regulating the new esoteric financial products—derivatives including credit default swaps—for otherwise there would be no regulation at all of financial products that could dwarf the stock and bond market. Summers persuaded her to back off. When the Meltdown of 2008 hit, the huge derivative exposure of the large banks and some insurance companies was so great that it was one of the major causes for the meltdown of the entire banking system. Summers, normally a great economist not only called this one wrong, but later, along with most other government and private economists ignored a very explicit warning—See {637168}, {637986}, and {620038}.
Ben Shalom Bernanke is an American economist at the Brookings Institution who served two terms as the 14th Chair of the Federal Reserve, from 2006 to 2014. During his tenure as chair, Bernanke oversaw the Federal Reserve's response to the late-2000s financial crisis, for which he was named the 2009 Time Person of the Year. Before becoming Federal Reserve chair, Bernanke was a tenured professor at Princeton University and chaired the department of economics there from 1996 to September 2002, when he went on public service leave.
