Time magazine has named U.S. Federal Reserve Board Chairman Ben Bernanke as its Person of the Year - and given us a rare glimpse into the man behind the Fed.
Time chose Mr. Bernanke to succeed Barack Obama for this annual honour on the rationale that his actions kept a recession from tumbling into a depression. Whether you agree or not, it's hard to argue that Mr. Bernanke wasn't a pivotal figure in one of the most interesting and challenging years for the global economy and financial markets in our generation - maybe several generations.
As part of its Person of the Year package, Time got an exclusive interview with Mr. Bernanke - the first print interview he has done since he became Fed boss almost four years ago. The interview and accompanying stories are available on Time's website.
Some of the highlights:
- Mr. Bernanke is a "nerd" who typically eats at home with his wife rather than going out to Washington functions, washes his own dishes and takes out his own garbage, and likes to read and do crosswords in the evening. "He just happens to be the most powerful nerd on the planet," Time says. (Bill Gates may dispute that.)
- He's a small-town kid from the farming community of Dillon, S.C., and still feels in touch with the economic grassroots from where he came. "I'm not one of those people who look at this as some kind of video game. I come from Main Street, from a small town that's really depressed. This is all very real to me."
- He was a state spelling bee champ who finished 26th in the national finals - he was tripped up by "edelweiss."
- Like former president Bill Clinton, Mr. Bernanke is a sax player.
- He was a tenured professor at Princeton by the age of 31.
- Mr. Bernanke figures the stimulus-tempered recession will ultimately have cost the U.S. economy less than 1 per cent of its national output - compared with anything from 5 to 20 per cent in a major financial crisis. "How much would you pay to avoid a second Depression? I mean, this is a pretty good return on investment."
And here are some quotes from the man himself:
- "We were certainly aware of the risks of financial crisis, but one as large and as dangerous as this one, I certainly did not anticipate. I wish I had, but I didn't."
- "It's true that the Federal Reserve faces a lot of political pressure and is unpopular in many circles. The Federal Reserve's job is to do the right thing, to take the long-run interest of the economy to heart, and that sometimes means being unpopular."
- "We have told the banks very clearly that we want them to make loans to creditworthy borrowers. It's in the interest of the banks, it's in the interest of the economy, and, of course, it's in the interest of the borrowers for those loans to get made. But the problem is that we got into trouble in the first place by banks making loans that couldn't be repaid, so we don't want banks to make bad loans."
- "I think one of the lessons of the Depression - and this is something that Franklin Roosevelt demonstrated - was that when orthodoxy fails, then you need to try new things."
