Ben Bernanke’s memoir, The Courage to Act, is an important, readable chronicle of his eight years as Chairman of the Federal Reserve Board (Fed). His account is a distinctive commentary because he served two presidents--one Republican and one Democrat--during the nation's most serious economic crisis since the Great Depression. He writes with extensive background knowledge both as researcher and practitioner about economic depressions: “Major panics involve both illiquidity and insolvency, and so both short-term lending and injections of capital may be required to end them. When a serious panic occurs, significant damage to the broader economy is almost inevitable. . . As credit tightens and asset prices fall, firms and households hit the pause button. Hiring, investing, and spending fall precipitously. . .”
He describes in rich and lively detail the strategies employed by the U.S. Department of Treasury and the Fed in combatting the very real threat posed by the financial and economic meltdowns. These strategies included the Troubled Asset Relief Program (TARP), the American Recovery and Reinvestment Act of 2009 (AARA), monetary policy, quantitative easing, and fiscal policy (taxing and spending). He writes, “I am sure the Recovery Act helped create jobs and slow the economic contraction—a conclusion shared by our own staff and the nonpartisan Congressional Budget Office. . . .Over the next few years, I came to agree that, from a purely economic perspective, the program probably was too small.”
His writing style is lucid and easy to read. He creates interesting narratives about meetings with presidents, cabinet members, congressional leaders, finance executives and his role as Fed Chairman. He provides even-handed criticism of both Congressional Republicans and Democrats in the handling of the economic crisis. [Republicans] “condemned bailouts as giveaways of taxpayer money without considering the broader consequences of the collapse of systemically important firms. They saw inflation where it did not exist and, when the official data did not bear out their predictions, invoked conspiracy theories. They denied that monetary policy or fiscal policy could support job growth while still working to direct federal spending to their own districts.” On the other hand, some Democrats “seemed to see the world as a vast conspiracy of big corporations and the wealthy.”
The author summarizes his career at the Fed with certain financial metrics to illustrate how a number of the measures undertaken by the Federal government during his tenure paid off:
• In August 2010 the unemployment rate was 9.6 percent—in August 2012, 8.1 percent and in October 2014 it was 5.7 percent. The country added 3 million new jobs in 2014.
• The Fed provided $470 billion in “remittances” to the U.S. Treasury from 2009 to 2015—triple the amount provided from 2001-2006.
• The U.S. had the strongest economic recovery in the world because the Fed eased monetary policy more than other central banks in other countries did.
• Oil prices dropped from $100 per barrel in 2014 to $50 in 2015.
• Inflation remained low at about 2 percent.
Ben Bernanke provides a wonderful narrative capstone to his years of service to the country by providing an engaging memoir about his experiences as head of the Federal Reserve Board. I recommend it most enthusiastically.
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About the author
the a destruction of trust and full faith is worse than a run on the banking system
If your goal is to read a bland PR attempt to resurrect an image then buy it. However, all it really does is show the incompetence of the people at the Treasury, the Federal Reserve, and the New York Fed.While trying to provide academic explanations for fraud and abuse of the system, it fails to deliver the reality, which is that American currency, which is based on the full faith and credit, has no basis for either. The system, filled with self-infatuated graduates of Harvard, Yale, Princeton and other schools of the elite trust fund generation demonstrates its self interest in finding explanations and academic prose for fraud, incompetence, and greed.With no penalties such as jail time for bankers who defrauded Americans, extorted homeowners with a fictitious "Blank Endorsed Check" defenses, and checkbook justice settlements for a fraudulent securitized mortgage scam, the destruction of trust and full faith is worse than a run on the banking system. What Benanke fails to accomplish is to acknowledge that this financial crisis is different from the academic studies of the great depression. This is the crisis that permanently exposed the fraud of the system and the discriminatory approach of protecting the inside group, giving special 12th hour deals like Hank getting a tax-free partnership distribution, allowing banks who commit fraud to get a free pass and pay their way out of a well-deserved prison terms by buying the justice system, and a failure to pull bank charters from corrupt and incompetent management teams who borrowed from the Fed, bought their stock or Treasuries, and benefited in spite of deserving to lose all of their wealth if they practiced a true capitalistic definition of having consequences for bad decision making.All in all, this book is slow moving, but does give an educational view of how the former Chairman likes to slap backs with other cronies and get a book out before Christmas.It shows that all of the characters feel the need to resurrect careers and Public Relations images so their families can look them in the eye and at least eat a piece of turkey with them at Thanksgiving without warning them to choke. That can't be said for the general population who would love to see the corrupt bankers choke on themselves. Bernanke appears to be academically oriented, not politically motivated whereas the others appeared to be intentionally and blatantly manipulative to favor their entrenched trust fund supporters. This differs from the other books on the subject written by insiders, who showed a need to let their ego be the focus. What is left unsaid is whether or not money was skimmed off the top and funneled anywhere; Also, nobody ever wants to provide an accounting for all of the funds dispersed, and whether a financial terror event took place to trigger events that unfolded.It seems by writing in an academic prose, taking responsibility and accountability is left undone. However, as a reader, I want heads to roll, jail terms to be offered and accepted, and bank charters to be puled. Until then , there is no faith or credit in this system, and I believe the majority of Americans, in their silent resolve, are looking at it in a similar manner . Highest level of citizen renouncements; Trump as leading candidate; Yes - this crisis was different. Liquidity mattered. But trust mattered more - and it was no where to be found among those making decisions.For anyone who reads "On the Brink", this book, and Timmy's book, you get a real hard reality check - Americans are pawns and an annuity stream to a very few select who consider power and access to the Treasury and Federal Reserve to be a privilege and entitlement. And their crokies may very well be skimming off of the top as we read.Interestingly, what should be exposed is the educational backgrounds of those in power. They seem to all go to similar schools and yet, our nation is in the worst condition, and this failure highlights that most of the executives involved came from those "prestigious" alumni. It is a wonder that statistically speaking, Long Term Capital, Lehman, Bear Stearns, Merrill Lynch, New York Fed, - the alumni have been pretty dismal and the teachings seem to be more about how to scam tax payers and pass risk on to others rather than create sustainable value. America is now the largest investment bank, and the leverage will sink it someday to the proportions of a Greece - thanks to the people who were at the helm, and who have all now written their books to attempt to resurrect their careers and legacy as the consequences of their decisions show up i the demise of America and Democracy, and the rise of a corrupt supply of money to corrupt entities.After reading the first three quarters, I sadly shut the book, looked at my flag, and recalled the conversation from yesterday's lunh, where all three of us talked about which country to move to as this one implodes due to its financial corruption at the top.
Top reviews from other countries
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- Alok KejriwalReviewed in India on September 11, 2022
A fabulous gem of a read that teaches financial and business wisdom!
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Cliente AmazonReviewed in Spain on August 25, 2022
época de la crisis financiera/macroeconomía
