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Ben Bernanke
Former Chairman; Federal Reserve (2006-2014); Nobel Laureate
Fed Chair during the 2008 financial crisis; architect of bank bailouts that socialized losses while privatizing profits
Overview
Ben Shalom Bernanke served as Chairman of the Federal Reserve from 2006 to 2014; presiding over the worst financial crisis since the Great Depression. Bernanke's Fed failed to anticipate the housing bubble and subprime mortgage crisis despite warnings; then orchestrated unprecedented bailouts totaling $700 billion in TARP funds and over $4 trillion in quantitative easing that primarily benefited large financial institutions while millions of Americans lost their homes. Under his leadership; the Fed approved the emergency acquisition of Bear Stearns by JPMorgan Chase ($29 billion in Fed guarantees); the $85 billion bailout of AIG; and the rescue of the largest banks deemed "too big to fail." Not a single senior Wall Street executive was prosecuted for the fraud that caused the crisis. Critics argue Bernanke's policies created moral hazard by teaching banks that they would be rescued from their own reckless behavior; while ordinary Americans received no comparable assistance. He was awarded the 2022 Nobel Prize in Economics for research on banks and financial crises; prompting widespread criticism.
Key Affiliations
Controversies & Concerns
Failed to regulate subprime mortgage market despite warnings; told Congress in 2007 that "the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained"; months before the worst financial crisis in 80 years
Orchestrated the $700 billion TARP bailout and $4+ trillion in quantitative easing that primarily benefited large banks; while 3.8 million homeowners lost their homes to foreclosure in 2010 alone
Approved the $85 billion AIG bailout that effectively paid Goldman Sachs and other counterparties 100 cents on the dollar for toxic assets; Goldman Sachs received $12.9 billion of AIG bailout money
After leaving the Fed; immediately joined Citadel LLC (Ken Griffin's hedge fund) and PIMCO as a senior advisor; exemplifying the revolving door between regulators and the institutions they oversee
The Fed under Bernanke kept interest rates near zero for years after the crisis; creating asset bubbles in housing and equities that primarily benefited wealthy asset holders while wages stagnated
2022 Nobel Prize generated criticism; with many arguing it was inappropriate to award an economics prize to someone who failed to prevent the worst economic crisis since the Great Depression
Related Investigations (1)
Known Associates & Connections
Henry Paulson
Treasury Secretary during 2008 crisis; former Goldman Sachs CEO; coordinated bailouts with Bernanke
Timothy Geithner
NY Fed President during crisis; became Treasury Secretary; key architect of bailout strategy
Alan Greenspan
Predecessor as Fed Chair whose low interest rate policies and deregulation advocacy contributed to the housing bubble
Sources & Documentation
3 documented sources from official records, investigations, and reports
Personal Information
- Born
- December 13, 1953
- Birthplace
- Augusta, Georgia, USA
- Also Known As
- Helicopter Ben
Education
- •Harvard University; A.B. Economics (summa cum laude) 1975
- •MIT; Ph.D. Economics 1979
Key Timeline
December 13, 1953
Born in Augusta, Georgia
1979
Earned Ph.D. in Economics from MIT; dissertation on the Great Depression
August 2002
Appointed to Federal Reserve Board of Governors by President George W. Bush
June 2005
Appointed Chairman of the Council of Economic Advisers
February 1, 2006
Became Chairman of the Federal Reserve; replacing Alan Greenspan
March 2007
Told Congress subprime crisis would be "contained"
March 2008
Approved $29 billion in Fed guarantees for JPMorgan's acquisition of Bear Stearns
September 16, 2008
Approved $85 billion emergency loan to AIG
October 3, 2008
Congress passes $700 billion TARP bailout
November 2008
Launched first round of quantitative easing (QE1); eventually purchasing $1.75 trillion in assets
January 31, 2014
Left Federal Reserve after second term; QE programs had totaled $4.5 trillion
April 2015
Joined Citadel LLC and PIMCO as senior advisor
October 10, 2022
Awarded Nobel Prize in Economics sparking controversy