Ben Bernanke named Time Person of the Year
Ben Bernanke testifies on Capitol Hill.
Ben Bernanke helped steer nation through worst economic crisis since the Great Depression. Photo: AP
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POLITICO 44
Federal Reserve Chairman Ben Bernanke, who helped steer the nation through the worst economic crisis since the Great Depression, was named TIME Person of the Year 2009 on Tuesday, eclipsing finalists who included President Barack Obama and House Speaker Nancy Pelosi.
“He didn’t just reshape U.S. monetary policy; he led an effort to save the world economy,” Time’s Michael Grunwald writes in the cover story, which will be on newsstands Friday.
Asked by Time in a Dec. 8 interview if bankers make too much money, Bernanke replied: “I think that bankers ought to recognize that the government and the taxpayer saved the financial system from utter collapse last year. And in recognizing that, I would think that bankers ought to look in the mirror and decide that perhaps there should be some more restraint in how much they pay themselves, given what the government and the taxpayer did to protect the system.”
In a letter explaining the choice to readers, Time Managing Editor Richard Stengel calls Bernanke “The Good Banker.”
“The recession was the story of the year. Without Ben Bernanke, Time’s 2009 Person of the Year, it would have been a lot worse,” Stengel writes. “Bernanke didn’t just learn from history; he wrote it himself and was damned if he was going to repeat it. Bernanke decided to do the opposite of what the Fed did back in the ’30s: he would loosen the money supply as far as it would go, he would save as many banks as he could, and he wasn’t going to hector the American public about pulling up their socks.”
Stengel had revealed a “short list” of finalists that also included Apple co-founder Steve Jobs; “The Chinese Worker”; Gen. Stanley McChrystal, the U.S. commander in Afghanistan; and Jamaican sprinter Usain Bolt.
Grunwald’s cover story calls Bernanke “the most powerful nerd on the planet.”
“A bald man with a gray beard and tired eyes is sitting in his oversize Washington office, talking about the economy,” Grunwald writes. “He doesn’t have a commanding presence. He isn’t a mesmerizing speaker. … Bernanke is the 56-year-old chairman of the Federal Reserve, the central bank of the U.S., the most important and least understood force shaping the American—and global—economy. … And ever since global credit markets began imploding, its mild-mannered¬ chairman has dramatically expanded those powers and reinvented the Fed. Professor Bernanke of Princeton was a leading scholar of the Great Depression. He knew how the passive Fed of the 1930s helped create the ¬calamity—through its stubborn refusal to expand the money supply and its tragic lack of imagination and experimentation. Chairman Bernanke of Washington was determined not to be the Fed chairman who presided over Depression 2.0.
“So when turbulence in U.S. housing markets metastasized into the worst global financial crisis in more than 75 years, he conjured up trillions of new dollars and blasted them into the economy; engineered massive public rescues of failing private companies; ratcheted down interest rates to zero; lent to mutual funds, hedge funds, foreign banks, investment banks, manufacturers, insurers and other borrowers who had never dreamed of receiving Fed cash; jump-¬started stalled credit markets in everything from car loans to corporate paper; revolutionized housing finance with a breathtaking shopping spree for mortgage bonds; blew up the Fed’s balance sheet to three times its previous size; and generally transformed the staid arena of central banking into a stage for desperate improvisation.”
Grunwald concludes: “As the terrifying memories of free-falling markets fade, Bernanke has become a political victim of his apolitical success. His boldness in the crisis feels like yesterday’s news. But if he’s adopting a less aggressive approach to guiding a weak economy around skittish markets, it’s not because he’s timid, stupid or indifferent to Main Street. He’s earned the benefit of the doubt. It’s now up to our dysfunctional political system to let him do his job—and to fix the financial system so that he never has to save the world again.”