In FED We Trust (43 page)

48
“a weak reed”
Meltzer, 413.

48
“I optimistically think that”
Randall Parker,
The Economics of the Great Depression: A Twenty-First Century Look Back at Economics of the Interwar Era
(Northampton, Mass.: Edward Elgar, 2007), 67.
http://www.ecu.edu/cs-educ/econ/upload/Ben_Bernanke.pdf

48
“Regarding the Great Depression”
Bernanke, “On Milton Friedman’s Ninetieth Birthday.”

48
“We may look”
“A Great Financier,”
New York Times
, April 1, 1913, 10.
http://query.nytimes.com/gst/abstract.html?res=9807E1DD1F3AE633A25752C0A9629C946296D6CF

50
only the third time:
Press release, Board of Governors of the Federal Reserve System, February 3, 2006.
http://www.federalreserve.gov/newsevents/press/other/ 20060203b.htm

50
“Alan Greenspan is perhaps”
The White House, “President Attends Swearing-In Ceremony for Federal Reserve Chairman Ben Bernanke,” February 6, 2006.
http://georgewbush-whitehouse.archives.gov/news/releases/2006/02/ 20060206.html

51
Bernanke’s Dashboard:
From publicly available sources. Price of oil is spot
price for West Texas Intermediate Crude. Unemployment is latest available on date shown. Financial stress indicator is spread between London Interbank Offered Rate (LIBOR) and overnight indexed swaps.

51
During the 2000:
Joshua Cooper Ramo, “After Greenspan: The Taylor Rule?”
Time
, February 26, 2001.
http://www.time.com/time/magazine/article/ 0,9171,999303,00.html

51
Richard Fisher:
Personal communication, Richard Fisher.

52
“Jim Baker didn’t”
Bob Woodward,
Maestro
(New York: Simon & Schuster, 2000), 19.

52
“How did my Jewish uncle”
Robert B. Reich,
Locked in the Cabinet
(New York: Alfred A. Knopf, 1997), 80.

53
“No one has yet”
Alan Blinder and Ricardo Reis, “Understanding the Greenspan Standard,” Federal Reserve Bank of Kansas City, Jackson Hole Conference, August 2005.
www.kc.frb.org/PUBLICAT/SYMPOS/2005/pdf/ BlinderReis.paper.0804.pdf

55
A week after Hurricane Katrina:
Greg Ip and Mark Whitehouse, “Awash in Cash: Cheap Money, Growing Risks — Stash Flow: Huge Flood of Capital to Invest Spurs World-Wide Risk Taking — Corporate and Foreign Savings Chase Assets, Driving Prices Up, Keeping Returns Low — ’A Global Game of Chicken,’”
Wall Street Journal
, November 3, 2005, A1.

56
Australia’s biggest homegrown:
Patrick Barta and Mary Kissel, “Awash in Cash: Cheap Money, Growing Risks — Buying Bridges: From Australia, Money Chases Roads, Airports Around Globe — Forced-Savings Plan Creates Big War Chest That Banks Match Up with Projects — Macquarie Bails Out Chicago,”
Wall Street Journal
, December 6, 2005, A1.

56
An investment partnership:
E. S. Browning, “Awash in Cash: Cheap Money, Growing Risks — Woodland Haven: U.S. Timberland Gets Pricey as Big Money Seeks Shelter — Rush Reflects Glut of Capital, Low Payoff on Other Assets; Sold: 5% of State of Maine — But Do Trees Grow to the Sky?”
Wall Street Journal
, November 4, 2005, A1.

56
“The most severe”
Charles W. Calomiris, “The Subprime Turmoil: What’s Old, What’s New and What’s Next,” Jackson Hole, Wyoming, October 2, 2008.
http://www.kc.frb.org/publicat/sympos/2008/ Calomiris.08.20.08.pdf

57
“make sense tactically”
Transcript, FOMC meeting, June 24-25, 2003.
http://www.federalreserve.gov/ monetarypolicy/fomchistorical2003.htm

57
“It was like someone”
“Outspoken: A Conversation with Nassim Nicholas Taleb,”
Washington Post
, March 15, 2009, B2.

58
“an eventual crisis”
William R. White, “Is Price Stability Enough?” Bank for International Settlements, April 2006.
http://www.bis.org/publ/work205.pdf

58
“We tried in 2004”
Greg Ip and Jon Hilsenrath, “Debt Bomb: Inside the Subprime Mortgage Debacle,”
Wall Street Journal
, August 7, 2007, A1.

58
“I will stipulate”
Transcript, FOMC meeting, August 12, 2003.
http://www.federalreserve.gov/monetarypolicy/ fomchistorical2003.htm

59
the
Wall Street Journal:
“WSJ Forecasting Survey — March 2008,”
Wall Street Journal
.
http://online.wsj.com//files/10/07/73/f100773/public/resources/documents/ wsjecon0308.xls

59
A 2004 Fed working paper:
Joshua Gallin, “The Long-Run Relationship between House Prices and Rents,” Board of Governors of Federal Reserve System, September 2004.
http://www.federalreserve.gov/pubs/feds/2004/200450/ 200450pap.pdf

59
“I would tell audiences”
Alan Greenspan,
The Age of Turbulence: Adventures in a New World
(New York: Penguin Press, 2007), 232.

60
“We cannot practice”
Transcript, Federal Reserve Bank of Kansas City, Jackson Hole Conference, August 2008.
http://www.kc.frb.org/PUBLICAT/SYMPOS/1999/ sym99prg.htm

61
“He didn’t say anything”
John Cassidy, “Anatomy of a Meltdown,”
The New Yorker
, December 1, 2008.
http://www.newyorker.com/reporting/2008/12/01/ 081201fa_fact_cassidy?currentPage=all

61
“The biggest bubble”
Alan S. Blinder and Ricardo Reis, “Understanding the Greenspan Standard,” Federal Reserve Bank of Kansas City, Jackson Hole Conference, August 2005.
http://www.kc.frb.org/publicat/sympos/2005/pdf/ blinderreis.paper.0804.pdf

61
“persistent and ultimately”
Phil Izzo, “Volcker Supports Popping Bubbles, Regulating Hedge Funds,”
Real Time Economics
, February 26, 2009.
http://blogs.wsj.com/economics/2009/02/26/volcker-supports-popping-bubbles-regulating-hedge-funds

61
“Mopping up after”
John Gieve, “Seven Lessons from the Last Three Years,” speech delivered February 19, 2009.

62
“In the subprime market”
Edward M. Gramlich, “Booms and Busts: The Case of Subprime Mortgages,” Federal Reserve Bank of Kansas City,
Jackson Hole Conference, August 2007.
http://www.kc.frb.org/ publicat/sympos/2007/pdf/Gramlich_0415.pdf

63
“He was opposed to it”
Greg Ip, “Did Greenspan Add to Subprime Woes? Gramlich Says Ex-Colleague Blocked Crackdown on Predatory Lenders Despite Growing Concerns,”
Wall Street Journal
, June 9, 2007, Bl.

63
“I told him”
“‘The Impact Was Larger Than I Expected’: Greenspan’s Chats with the Journal,’”
Wall Street Journal
, April 8, 2008.
http://online.wsj.com/article/SB120759233667695449.html#

64
“planned to be largely passive”
Greenspan,
Turbulence
, 373.

64
“It is effective”
Alan Greenspan, letter to John J. LaFalce, May 30, 2002.

65
“I made a mistake”
House Committee on Oversight and Government Reform, hearing, October 23, 2008.
http://oversight.house.gov/story.asp?id=2256

68
“The Fed needs”
Ben S. Bernanke, Frederic S. Mishkin, and Adam S. Posen, “What Happens When Greenspan Is Gone?”
Wall Street Journal
, January 5, 2000, A22. 68
“That’s the one thing”
Interview, Ben Bernanke.

68
Bernanke was a clue:
New York Times
crossword puzzle, November 12, 2008, 21-Across. Personal communication with Bob Klahn.

68
“Cause of difficulty”
“Shuffled Cards,”
New York Sun
, August 24, 2007, 34-Across.
http://www.nysun.com/crosswords/subscriber_puzzle.php

69
tobacco town of 6,400:
S.C. Budget and Control Board, “Office of Research & Statistics, Population 1950-2000 Cherokee, Chester, Chesterfield, Clarendon, Colleton, Darlington, Dillon,” from South Carolina Population Reports Web site
http://www.ors2.state.sc.us/population/pop03c.asp

69
“In Dillon”
Ben S. Bernanke, “Chairman Ben S. Bernanke National and Regional Economic Overview at the Presentation of the Citizen of the Carolinas Award,” from Board of Governors of the Federal Reserve System Web site, November 29, 2007.
http://www.federalreserve.gov/ newsevents/speech/bernanke20071129a.htm

69
the comic book section:
Ben S. Bernanke, “Chairman Ben S. Bernanke at the Presentation of the Order of the Palmetto, Dillon, South Carolina,”
from Board of Governors of the Federal Reserve System Web site, September 1, 2006.
http://www.federalreserve.gov/newsevents/speech/ Bernanke20060901a.htm

69
“Grandma, why don’t you teach”
Phil Izzo, “Bernanke Advises Going Long on Blintzes,”
Real Time Economics
, December 3, 2007.
http://blogs.wsj.com/economics/2007/12/03/bernanke-advises-going-long-on-blintzes

70
“One of his teachers”
Greg Ip, “Banker in Chief: Bernanke Is Named to Lead the Fed — Ex-Academic Is Expected to Focus on Inflation, Not on ‘Asset Bubbles’ — Stock Investors Cheer the Pick,”
Wall Street Journal
, October 25, 2005.

70
“UNC-Chapel Hill”
Interview, Ben Bernanke.

70
“I assured them”
Interview, Kenneth Manning.

70
“was the superstar”
Michael M. Grynbaum, “At Harvard, They Hail a Fed Chief,”
New York Times
, June 5, 2008, 1.

71
Pedro’s South of the Border:
Bernanke, “Chairman Ben S. Bernanke at the Presentation of the Order of the Palmetto.”

71
“Ben Bernanke Interchange”
H. 4600, South Carolina General Assembly, 117th session.
www.scstatehouse.gov/sess117_2007-2008/bills/4600.doc

72
“It’s just a great sense”
Michael Phillips, “Fed Chief’s Boyhood Home Is Sold after Foreclosure,”
Wall Street Journal
, February 15, 2009, A1.

72
“He wasn’t a prima donna”
Interview, Stanley Fischer. 72
“My first reaction”
Interview, Mark Gertler.

75
how the trio:
Time
, February 15, 1999.
http://www.time.com/time/covers/0,16641,19990215,00.html

76
“Fix the roof”
Bernanke et al. “What Happens When …”

76
“All I had in mind”
Interview, Ben Bernanke.

76
Research Papers in Economics database:
University of Connecticut: IDEAS Repec. “Top 5% Authors as of December 2008,” December 2008.
http://ideas.repec.org/top/top.person.nbcites.html

76
“On the administrative side”
Ben S. Bernanke, “Remarks by Governor Ben S. Bernanke at the Annual Meeting of the American Economic Association, Philadelphia, Pennsylvania: The Transition from Academic to Policymaker,” January 7, 2005.
http://www.federalreserve.gov/boarddocs/speeches/ 2005/20050107/default.htm

77
“We were always pessimistic”
Federal Reserve Board of Governors, “Meeting of the Federal Open Market Committee,” August 13, 2002.
http://www.federalreserve.gov/ monetarypolicy/files/FOMC20020813meeting.pdf

77
“I support your recommendation”
Federal Reserve Board of Governors, “Meeting of the Federal Open Market Committee,” December 10, 2002.
http://www.federalreserve.gov/ monetarypolicy/files/FOMC20021210meeting.pdf

78
He lamented:
Bernanke, “The Transition from Academic to Policymaker,” American Economic Association, January 7, 2005.
www.federalreserve.gov/ BOARDDOCS/SPEECHES/2005/20050107/default.htm

78
“essentially equivalent”
Ben S. Bernanke, “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” Federal Reserve Board, November 21, 2002.
http://www.federalreserve.gov./BOARDDOCS/ SPEECHES/2002/20021121/default.htm

79
“Now YOU can drop”
David Beckworth, “‘Helicopter Ben’ Pictures,”
Macro and Other Market Musings
, September 19, 2007.
http://macromarketmusings.blogspot.com/ 2007/09/helicopter-ben-pictures.html

79
“Big Ben Fires Up”
Joshua Zumbrun, “Big Ben Fires Up the Chopper,”
Forbes
, December 8, 2008.
http://www.forbes.com/businessinthebeltway/2008/ 12/06/bernanke-fed-recession-biz-beltway-cx_jz_1208interest.html

79
“A part of monetary policymaking”
Bernanke, “Transition from Academic …”

81
“I came to trust”
The White House, “President Attends Swearing-in Ceremony for Federal Reserve Chairman Ben Bernanke,” February 6, 2006.
http://georgewbush-whitehouse.archives.gov/news/releases/2006/02/
20060206.html

81
When the time came:
Interviews with Ben Bernanke, Keith Hennessy, and Allan Hubbard.

82
“While speculative behavior”
Ben S. Bernanke, “Skills, Ownership, and Economic Security,” July 12, 2005.
http://georgewbush-whitehouse.archives.gov/cea/20050712.html

84
“embarked on a fundamentally”
Vincent Reinhart, “The Governance, Communication and Conduction of the Federal Reserve’s Monetary Policy,” February 29, 2008.
http://research.chicagogsb.edu/igm/events/docs/Reinhart-SecondMonetaryPolicyForum.pdf

86
“I will tell you that”
Transcript, FOMC, July 2-3, 1996.
http://www.federalreserve.gov/monetarypolicy/files/ FOMC20020319meeting.pdf