Former Federal Reserve Chairman Ben Bernanke will stay in Washington to join the Brookings Institution.
According to a statement from Brookings, the former Federal Reserve Chairman will join the Economic Studies program as a Distinguished Fellow in Residence, effective February 3, 2014.
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A big hire for Brookings
Bernanke will be affiliated with the Hutchins Center on Fiscal and Monetary Policy, which will bring rigorous research analysis to critical questions in the two vital areas of economic policy.
Thanks to the generous support of Brookings Vice Chair of the Board of Trustees Glenn Hutchins, Brookings launched the Hutchins Center on January 16. Glenn Hutchins’s $10 million grant from the Hutchins Family Foundation supports the activities of the Hutchins Center.
Glenn Hutchins is the founder of Silver Lake, a private equity investment firm, besides being a director on the board of the Federal Reserve Bank of New York. David Wessel, former Wall Street Journal economics editor is the director of the Hutchins Center.
Wessel in his blog post on the appointment said: “We’re looking forward to helping Mr. Bernanke with the book he plans to write, and to getting his advice as we work to improve public understanding of fiscal and monetary policy and improve the quality and effectiveness of those policy,”
Fed Chair – a lightning rod for criticism
The Fed Chair is often a lightning rod for criticism. When Bernanke came into office in 2006, the United States was at the tail end of one of the longest periods of prosperity and economic growth in its history. Bernanke, along with others, was confident that the mounting problems in the United States housing market would fix themselves, and that the fallout would not be severe. What Bernanke failed to see was the extent of the mounting losses, the depths of illegal acts and moves on the part of financial institutions, and how the derivatives market had tied numerous companies together and set them up to fail.
Despite his success in mitigating a financial meltdown, many members of Congress and various pundits slammed Bernanke for acting too slow, or else not doing enough, or conversely for interfering with markets at all.
Bernanke to be remembered..
Bernanke will likely be remembered for weathering the financial crisis. What he didn’t know, and perhaps no one else knows, is how to engineer a sustained economic recovery.