Bernanke, 59, oversaw the country’s descent into financial crisis as well as its slow climb out. Not surprisingly, the mild-mannered and famously unflappable Fed chairman has heard his share of criticism during his seven years in the post—for failing to recognize the crisis in its infancy, for bailing out big banks, and for unorthodox efforts to try to bolster the economy.
The latter has brought a particularly vitriolic response from the Right. Bernanke, who is a Republican and an expert on the Great Depression, deployed an unconventional toolkit in response to the crisis. The Bernanke-led Fed cut the central bank’s benchmark interest rate to zero, conducted a series of large-scale bond purchases, and became more transparent than ever. Conservatives in Congress worry the actions could inflate an asset bubble or lead to soaring inflation, and they have threatened measures to clip the politically independent central bank’s wings. Some on the Left, on the other hand, say the Fed hasn’t done enough to boost the economy in the face of prolonged high unemployment.
Those opposing concerns will dominate the remainder of Bernanke’s second term, which ends on Jan. 31, 2014. The big question is how and when the Fed should pull back from its easy-money policies. The Fed chief may not be around to see the answer through. Bernanke is widely expected to step down in January, although he has so far declined to comment on his plans and could stay if President Obama makes a hard sell for a third term.
Bernanke was raised in Dillon, S.C. He developed an affinity for the Boston Red Sox while studying economics as a Harvard University undergrad and an MIT doctoral student. He taught at Princeton University before President Bush appointed him to serve on the Fed’s Board of Governors in 2002 and to head the White House Council of Economic Advisers in 2005. The baseball-loving central banker has since become a Washington Nationals fan and even wrote a Wall Street Journal essay last year about what Washington can learn from the Nats.
Bernanke composed a new playbook for central banks. Time will tell whether his easy-money policies sowed the seeds of the next economic disaster or were the bold steps needed to save the economy.