Bernanke on Bernanke Essay

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In a recent article in Bloomberg, reporter Jeannine Aversa gives some history and advice for Ben Bernanke, Fed Chief from Ben Bernanke the scholar. Ben's advice in a nutshell? "Be bold." Ben Bernanke began his 4 year appointment as Fed Chairman and 14 year term on the Federal Reserve Bank's Board of Governors February 1, 2006 by President George H.W. Bush. He was appointed to a second term as the Chairman on February 1, 2010 by President Barack Obama. Dr. Bernanke received his B.A. in economics from Harvard in 1975 and a Ph.D. in economics from the Massachusetts Institute of Technology in 1979 (Federal Reserve, 2011). The article in Bloomberg hits on a few key spots where Bernanke has had to be bold in his actions in an effort…show more content…
On his watch, the Fed has also had to purchase mortgage securities as well as government debt in an effort to revive the housing market and promote spending by Americans (Aversa, 2011). Another effort to promote spending by consumers was a payroll tax cut called for by Bernanke along with buying up $600 billion in bonds through an open market operation. When the Federal Open Market Committee (FOMC) wants to increase the money supply, they buy up government bonds from the public on the bonds markets (Mankiw, 2009). The result of buying bonds puts money in the pockets of the public, if the Fed wants to decrease the money supply, they sell off bonds. It is generally thought that when the public has more money available to them, they will consume more. This increased consumption should lead to an overall increase in Gross Domestic Product (GDP) and expansion of the economy. GDP is the market value of all final goods and services produced within a country in a given period of time. GDP is basically the measure of a nation's total income and is an important tool in explaining a single society's economic well-being (Mankiw, 2009). To some extent that was the case, consumption did increase for a short period of time after the Fed's Quantitative Easing (QE). 2010 and the first half of 2011, saw some good
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