The Feds Man From Princeton

Colleagues call Bernanke a pillar of diligence and common sense

Colleagues call Bernanke a pillar of diligence and common sense

Ben Bernanke, the long-time Princeton University economist whom President Bush last week nominated to chair the Federal Reserve Board, is thoughtful, low-key and remarkably quick to respond to e-mails. “Almost invariably when I would send him an e-mail, he would answer back in 10 minutes,” says Eric Maskin, an economist at the Institute for Advanced Study in Princeton who teaches at Princeton University. “This happened even late at night. He was unbelievably fast in replying.”

Maskin was among those who have worked closely with Bernanke (rhymes with Yankee) who hailed his nomination to the world’s most powerful economic policy position. If he is confirmed by the Senate, as seems highly likely, Bernanke, 51, will succeed Alan Greenspan as the person with the most influence over the direction of interest rates and the health of the U.S. economy. Greenspan’s current term expires next February. “This is a terrific nomination,” says Maskin. “I breathed a huge sigh of relief for the country.”

At Princeton, where Bernanke taught from 1985 to 2002, last week’s deluge of press calls overwhelmed media relations manager Cass Cliatt. “We’re in the middle of midterms and the professors aren’t taking phone calls,” sighed Cliatt, who posted e-mailed comments from faculty members at www.princeton.edu under the heading “Announcements.”

Bernanke, wrote Princeton economist Alan Blinder, a former vice chairman of the Federal Reserve, “has all the ingredients to be a great Fed chairman.”

Unlike Greenspan, whose 18-year tenure as Fed chairman has been marked by Delphic utterances, Bernanke tends to say exactly what he means. As a member of the Montgomery School Board from 1994 to 2000, he was known for his ability to explain things clearly, particularly where dollars and cents were concerned.

“He’s quite willing to express his opinions,” says Maskin, who adds that Bernanke does so in a “nonaggressive manner and tends to wait until he’s thought things through.”

As an economist, Bernanke has favored so-called inflation targeting, a policy that calls for adjusting interest rates to meet a publicly stated low-inflation goal. That would differ from the approach used by Greenspan, who tamped down inflation without setting specific targets.

Bernanke, who holds a Ph.D. from the Massachusetts Institute of Technology, chaired the Princeton economics department for five years before being named a Federal Reserve Board Member in 2002. He left that post last June to become chairman of the President’s Council of Economic Advisers. He and his wife Anna, who have two children, sold their Montgomery home for a reported $630,000 when they moved to Washington, D.C.

Bernanke grew up in South Carolina, where as a high school student he won the state spelling bee. He graduated summa cum laude from Harvard University before going on to M.I.T.

As he prepares for U.S. Senate confirmation hearings, Bernanke knows he will face a grilling. But that will likely be no tougher than the ones he experienced as a school board member in Montgomery. Bernanke described his service there to the Reuters news service as “six grueling years during which my fellow board members and I were trashed alternately by angry parents and taxpayers.”

E-mail to jgreenwald@njbiz.com

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