- The Washington Times - Monday, October 24, 2005

Ben Bernanke, an economist known for intellectual curiosity, posed a question in the Wall Street Journal five years ago — “What Happens When Greenspan Is Gone?”

President Bush gave his answer yesterday: He will replace retiring Federal Reserve Chairman Alan Greenspan with Mr. Bernanke.

Mr. Bernanke, 51, is an Ivy League-trained academic, a former member of the Federal Reserve’s Board of Governors and chairman of the president’s Council of Economic Advisers since June.

“Ben Bernanke is the right man to build on the record Alan Greenspan has established,” Mr. Bush said from the Oval Office, summing up a resume of scholarly achievements, written accomplishments and academic pursuits.

The bearded Mr. Bernanke stood nearby, as did Mr. Greenspan, who had consulted with Mr. Bush on his replacement. Mr. Bush had called Mr. Bernanke from Air Force One Friday, and he offered him the job early yesterday morning in a White House meeting.

The president mentioned Mr. Bernanke’s speeches — “widely admired for their keen insight and clear, simple language.”

In other words, he doesn’t talk like Mr. Greenspan.

Although “irrational exuberance” and the housing market’s “signs of froth” were Mr. Greenspan’s calling cards — language that left economists and the public parsing his words — Mr. Bernanke favors plain talk.

A believer in keeping inflation at about 2 percent, Mr. Bernanke has reached into children’s literature to embrace a “Goldilocks” theory — not too hot, not too cold.

At the confirmation hearing for his previous Fed job in July 2002, Mr. Bernanke told the Senate Banking Committee, “Saturation coverage by cable TV networks notwithstanding, the stock market is not the whole economy.”

Mr. Bernanke’s approach extends from the world of monetary policy to the local school board. He served two terms as a member of the Montgomery Township Board of Education in New Jersey, not far from Princeton University, where he was an economics professor and department chairman.

“He was very good at seeing the big picture and being able to translate a difficult concept into plain English,” said Laurie Navin, who served on the school board with Mr. Bernanke for six years. “When you’re talking about long-term costs of a contract and, you know, people would be worried about 50 cents and he would be able to explain whether that mattered or not in the long term.”

Friends describe an unassuming man with a wry sense of humor.

After interviewing at the White House for the post on the Fed board, Mr. Bernanke sent an e-mail message to Ms. Navin and other former school board members describing his experience.

“He was so excited — he said, ‘I interviewed with Dick Cheney and George Bush in the Oval Office and they were asking me all these questions and they asked if I had ever served in an elected position, and I said, “It may mean nothing here, but I served on my local school board.” And Mr. Bush said, “It’s good enough for me, you’re in,”’” according to Ms. Navin.

Born in Georgia and raised in Dillon, S.C., Mr. Bernanke was an academic star. In sixth grade, he won the state spelling bee but missed higher acclaim when he faltered on the word “edelweiss,” the mountain flower. He got a score of 1,590 on his SAT out of a possible 1,600, taught himself calculus in high school and then focused on economic numbers at Harvard.

Mr. Bernanke graduated summa cum laude in 1975, and his senior honors thesis — a 102-page paper titled “An Integrated Model for Energy Policy” — won the Allyn A. Young prize for the economics undergraduate student who submits a work of the highest caliber.

He received his doctoral degree in economics from the Massachusetts Institute of Technology. His focus during his years in Boston were the underpinnings of the Great Depression, but his obsession was the city’s beloved baseball team, the Red Sox.

Mr. Bernanke, a Washingtonian of late, recently switched his allegiance to the capital’s baseball team, the Nationals.

Friends say Mr. Bernanke eschews ideology. In answers to the Senate questionnaire for the Fed job, Mr. Bernanke said he was registered Republican but had made no political contributions of more than $500.

Richard Yamarone, chief economist at Argus Research in New York, praised Mr. Bernanke’s intelligence and abilities but questioned the wisdom of picking an academic with no Wall Street experience to run the central bank.

“I don’t know if we’re going to come up with another maestro,” Mr. Yamarone said, referring to Mr. Greenspan. “We’re more in line to get a college music professor.”


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