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Ben Bernanke (also known as Helicopter Ben, The Beard, Bubble Ben and The Ben Bernank) is a former chairman of the Federal Reserve, appointed by George Bush in 2006 to replace the retiring Alan Greenspan. He was rehired by Obama in 2010.
He presided over the 2007 home mortgage crisis which hit as soon as he took over. Bernanke was toxic by both parties around this time, because there always has to be a whipping boy for economic downturns. Alex Jones and Cenk Uygur know their market well, and that Americans are as ignorant about the situation as they are.
Ben Bernanke first achieved prominence through his academic work on the Great Depression that expanded on the work of Milton Friedman found in his Monetary History of the United States. He remarked in a speech on his work:
“”Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.
This quickly set off the conspiracy nuts (more on that in the next section). He also revived the image of Friedman's "helicopter drop" of money, i.e. the use of monetary policy to stave off deflation by drastically increasing the money supply. Bernanke's political views are difficult to pin down. Despite building his work on Friedman's and being known as a monetarist, he did not use his chairmanship as a lectern from which to preach free market fundamentalism as Greenspan did. His concentration on fighting deflation over inflation angered some conservatives and he was generally unwilling to comment about political issues, making him seem rather centrist.
Bernanke was charged with general stupidity, willful ignorance, and criminal negligence due to his handling of the financial crisis. By Hanlon's Razor, he is guilty of at least the first of those charges. In 2006, he started dropping the interest rate to 1% (and later to 0%) in the belief that it would lend stability to the market. In fact, it led investors to believe it was simply a continuation of Greenspan's policies (they were right) and talk of the "Greenspan put" turned into the "Bernanke put." Bernanke reassured everyone that everything was sunshine and gumdrops and issued what are now seen to be his famous last words in 2007:
“”At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.
In 2010, Ron Paul and Bernie Sanders got their wishes granted to audit the Fed. As a result, Bernanke was found to have bought up trillions worth of shitty assets from banks as well as playing favorites with AIG and funneling money overseas in sketchy deals with Deutsche Bank and Credit-Suisse in what was called a "backdoor bailout."
Conspiracy theories and other bullshit
Bernanke was criticized by wingnuts for putting the US in danger of heightened inflation or hyperinflation by printing money and throwing it from his moneycopter into the economy. These people simply do not understand how the Fed and Bernanke's moneycopter actually operated. Fed chairpersons can only control monetary policy — all they can do is print money to monetize debt by buying up bonds. During Bernanke's reign, most of this money sat in bank vaults as reserves hit a record high, which John Maynard Keynes called the "liquidity trap." This means Bernanke only increased the monetary base, but did not actually have an effect on the amount of money flowing through the rest of the economy. (Japan attempted to fight off deflation in the 1990s and 2000s using sustained quantitative easing and it was still not enough to bring back inflation, no matter how much they printed, giving us a good modern day example of a massive liquidity trap.) Easing is also done in small installments over a number of months so its effects can be tracked and the program can be curtailed if necessary. Bernanke did not simply print billions of dollars at once and throw it at people in the street. If excess inflation does occur in the US, it is far more likely to be from rising oil and food prices than because of Bernanke-type policies (sorry, Luke Rudkowski-type). Interest rates can't go negative, so there's nothing such policies can do to help the economy any more either.
Bernanke was also at the center of a tornado of conspiracy theories. After his statement that "we did it" in 2002, Fed conspiracy nuts went crazy, trumpeting Bernanke's statement as if all their deranged alternate histories were vindicated, as if the Fed had intentionally created the Depression for who knows what reason. If you actually read some of Bernanke's work, he simply expanded upon Friedman's thesis that the Fed could have prevented the Depression from becoming a Depression by not tightening the money supply and that Herbert Hoover was too insistent on maintaining the gold standard. This view is in fact not controversial among most economists and historians (it has only been criticized by some for overstating the Fed's role). "We did it," in this context, is a paranoid quote mine by nuts who think the Fed controls just about everything.
Naturally, since Bernanke happens to be Jewish and a banker, there were a ton of anti-Semitic conspiracy theories claiming that he was a puppet of the Rothschild family. Conspiracy nuts often claim that he intentionally brought about the financial crisis in order to destroy the dollar and bring about hyperinflation, thereby enriching the Rothschilds at the expense of America, keeping us in debt slavery. Not only is this outright bullshit, it doesn't even make sense as a conspiracy. Wouldn't they want to keep the economy strong so they could skim money off the top and no one would notice, not destroy the economy so we can't pay back the debt while at the same time making people suspicious? Perhaps the Jewish bankers will claim ownership of the people? Well, you're barking up the wrong tree if you're looking for reason in conspiracy theories.
Austrian schoolers think Bernanke caused the recession, though their reasoning is non-racist but still dumb. Basically, they believe the Fed is responsible for business cycles.
Ben Bernanke was the recipient of a number of worthless awards:
- Distinguished Leadership in Government Award, Columbia Business School
- 2009 TIME Person of the Year
- Nominated for Best Beard of 2010 by MSN News.
- Fractional-reserve banking
- George Soros — Jews deserve a vacation with all these things they're supposedly behind.
- Remarks by Gov. Ben S. Bernanke on Milton Friedman's 90th birthday, The Fed
- Subprime Nonsense, Slate
- Lawmaker accuses Federal Reserve of conducting 'backdoor bailout' during financial crisis, Los Angeles Times
- This shitty, factually inaccurate, but funny (for econ nerds) viral video that Faux Noise and CNBC picked up for some reason helped fuel the QE2 hysteria and led to his nickname, "The Ben Bernank." This video is a more realistic explanation and it still has cute fuzzy bears in it.
- The powers that be work in mysterious ways, right?
- Essentially, what Bernanke was saying is not that the Fed intended for it to happen, but that it was ignorant of the correct monetary policy that could have averted or mitigated a deepening of the crisis after the crash, which is understandable, as the Fed hadn't even been around for two decades at that point.
- This site is a good example.