Weeeeeeeeeee!

Hey Ben, listen. I know I yell about you and cap on you and make you look like an idiot who shouldn't be in charge of the janitor at McDonald's, much less the Federal Reserve.

But today, in honor of our shared birthday, I'm going to be nice, promise. In fact, I'm going to share the story of Ben Bernanke with my readers. Maybe they don't understand that we Sagittarians are a unique breed. Hell, if I had a helicopter, I'd be doing way worse with it than you are.


Ben Shalom Bernanke was born December 13, 1953 in Augusta, Georgia to Philip and Edna Bernanke. Oldest of three children, Bernanke learned Hebrew from his grandfather, a professional Torah reader and hebrew teacher.

At 11, Bernanke won the state spelling bee, only to come in 26th at the national competition later that year in Washington. The word that tripped him up? Edelweiss.

Bernanke received a nearly-perfect score of 1590 (out of 1600) on his SATs before graduating at the top of his high school class and heading to Harvard. He graduated summa cum laude with a degree in economics in 1975. He received his PhD in economics from the Massachusetts Institute of Technology 4 years later in 1979.


Before taking the reins at the Federal Reserve from Alan Greenspan on February 1, 2006, Bernanke taught economics at the Stanford Graduate School of Business, New York University, and Princeton University. He also served as Chairman of the President's Council of Economic Advisers from June 2005 to January 2006

Bernanke served on the Federal Reserve Board of Governors from 2002 to 2006. His position as Federal Reserve Chairman may expire on January 31, 2010 should OMGObama choose not to extend it (likely he will not and will instead choose Larry Summers to fill the spot), though he will remain a member of the Fed's Board of Governors at least until January of 2020.


Bernanke's 2002 deflation speech remains one of the highlights of his Fed career. In the speech, Bernanke insists that the risk of deflation in the U.S., though small, is very possible.

With inflation rates now quite low in the United States, however, some have expressed concern that we may soon face a new problem--the danger of deflation, or falling prices. That this concern is not purely hypothetical is brought home to us whenever we read newspaper reports about Japan, where what seems to be a relatively moderate deflation--a decline in consumer prices of about 1 percent per year--has been associated with years of painfully slow growth, rising joblessness, and apparently intractable financial problems in the banking and corporate sectors. While it is difficult to sort out cause from effect, the consensus view is that deflation has been an important negative factor in the Japanese slump

As I have already emphasized, deflation is generally the result of low and falling aggregate demand. The basic prescription for preventing deflation is therefore straightforward, at least in principle: Use monetary and fiscal policy as needed to support aggregate spending, in a manner as nearly consistent as possible with full utilization of economic resources and low and stable inflation. In other words, the best way to get out of trouble is not to get into it in the first place. Beyond this commonsense injunction, however, there are several measures that the Fed (or any central bank) can take to reduce the risk of falling into deflation.

Of course, we won't get into the epic failure of our monetary system, because it's Ben's birthday and he deserves to enjoy his day. Let's worry about utter collapse on the 14th after the presents have been unwrapped and the candles have been blown out.

The highlight of that 2002 speech, of course, was Bernanke's claim that should all avenues fail, he could always resort to saving the economy by tossing money out of a helicopter. Though the quote is often misunderstood and has been a comedic goldmine for cynical finance bloggers and reporters alike, Bernanke was referring to an abstract and entirely fictional example first shared by economist Milton Friedman.


2007 wasn't such a great birthday for our friend Ben, what with the US economy just starting out on its painful road to failure. Of course, in 2007, no one called it a recession. Bernanke cut the interest rate just one quarter of a point for his birthday week last year; it is this sort of careful manipulation of the money system that, ironically, has not been the cornerstone of Bernanke's Fed career.

Newsweek calls Bernanke's Fed the most "creative" in the Fed's 94 year history (not really a shock, this is what happens when you put a Sagittarius in charge of the money supply - we're known for our charm, not our ability to make well-thought-out decisions!):

Bernanke's Fed has hardly been passive. Already, it has invented more economic tools than was done in any comparable period of the Fed's 94-year history. The object: to prevent a broad credit collapse. Since late 2007, the Fed has found novel ways to lend to banks, former investment banks, money market funds and issuers of commercial paper. It has dramatically increased dollar loans, called "swaps," to other government central banks, which then lend the dollars to their commercial banks.

When it comes down to it, we may be facing the worst depression since, well, the first one, but Bernanke came with the tools. I give him slack for being the Axis of Evil with Hank Paulson but the truth is, he's not the whole problem. Just a component in one very corrupt, crumbling machine. I respect him for his educational accomplishments (and am a bit jealous of his SAT score, though surely he did better in Math than I did), his teaching career, his intimate knowledge of economics, and his illustrious career at the Federal Reserve. Okay, I don't respect him for that last one. But I'm trying to be nice.

So Happy Birthday, Dr. Bernanke!

The irony of you and I sharing a birthday is not lost on me, trust me.

I'd like to take you to Chuck E. Cheese so we can play some skeeball but I think the one near my house has since gone out of business. Damn recession.