Ben Bernanke's Greatest Challenge

Fed Chairman Discusses Recession, Financial Rescues And Recovery In Wide-Ranging 60 Minutes Interview

(CBS)  Ben Bernanke is doing things with the Federal Reserve that have never been done before. It may be because he's not a creature of Washington or Wall Street.

He grew up, middle class, the smartest kid in a town now falling on hard times. He told Pelley, because the Fed is so powerful, it should be more open.

Bernanke meets with his six fellow governors of the Federal Reserve - all of them appointed by the president of the United States - at the Fed's headquarters. Bernanke also chairs the Federal Open Market Committee, which decides interest rates.

Those meetings, which take place inside the Fed's boardroom in Washington, are secret. Asked why, Bernanke took Pelley inside the boardroom and explained, "If we held those things with a TV camera on us it would create lots of volatility and problems in the market. But I should say that, you know, we've come a long way. In 1994, when the Fed made a policy decision to change interest rates, wouldn't even announce that we made a change. But now, after every meeting, we put out a statement, say what we did, explain what we did, why we're doing it. And three weeks later, we put out minutes to describe everything that happened in the meeting. So we're becoming much more transparent."

"When I called and proposed this interview about a year ago, your representative laughed out loud. And said, 'The Fed chairman never does an interview.' Why are you doing this?" Pelley asked.

"Well, it's an extraordinary time. It's an extraordinary time. This is a chance for me, I think, to talk to America directly," Bernanke said.

It's also a chance for America to understand where he comes from.

Ben Shalom Bernanke grew up in one of the few Jewish families in Dillon, S.C., today a town of 6,000 people.

His grandfather, Jonas, immigrated from Eastern Europe, landed at Ellis Island, and came to Dillon to start a drug store.

"Our family came here in 1941. My grandfather, Jonas Bernanke bought this building, made it to the JB Drugs, after his initials," Bernanke told Pelley.

Later, his father and uncle took over the store which has since become a restaurant.

"We're sitting on this corner where your family's store was. And I see it's Main Street. People feel like guys like you are tuned into what happens on Wall Street and you forget places like this," Pelley remarked.

"I come from Main Street. That's my background," Bernanke said. "I've never been on Wall Street. And I care about Wall Street for one reason and one reason only because what happens on Wall Street matters to Main Street. And if we don't have stabilization in the financial markets, if we don't take the steps necessary to make sure that credit is flowing again, then my father couldn't get a loan to build his new store."

Bernanke and Pelley went to the old neighborhood the Bernankes left years ago. A recent owner couldn't quite make the mortgage, so the economy literally hit home.

"When you first heard that your childhood home had gone into foreclosure, what did you think?" Pelley asked.

"Well, I was sorry to hear it. But, you know, in a way, I wasn't surprised. Dillon has taken, you know, a pretty big hit in the economic downturn. Unemployment rate's about 14 percent. And there have been a good number of foreclosures and plant closings and those things I think about that," Bernanke said.

Numbers were always Bernanke's thing: he taught himself calculus and got an SAT score of 1590 out of 1600. A friend talked him into aiming high for college.

"I came home from school one day and there was a phone call for me. And I picked up the phone. They said, 'This is the Harvard Admissions Department. We'd like to let you know that you're accepted in the freshman class.' And I said, 'Come on, who is this really?' But my parents had their doubts about my leaving and going too far from home," Bernanke recalled.

"No! Wait a minute. Your parents weren't thrilled that you were going to Harvard?" Pelley asked.

"My mother was definitely against it. First of all, she said, you know, 'You don't have the clothes. You won't be able to dress properly for Harvard. And it's a long way from here. How you gonna come home on holidays and so on.' So, my parents ate into their savings to let me go, which I'm always grateful for."

[AbdulGB]

Typo:
...but Ben Bernanke had never done an interview until he sad (sat) down with....

[mark1190david]

Your interview with Mr. Ben Bernanke was my last resort in dealing with Washington Mutual since it gave me a "brain storm" to go on the Federral Reserve web site to file a complaint, and they provided an intermediary on my behalf since I was spinning my wheels, and literally getting nowhere. In fact, I am passing this information along to other people. Thanks, 60 Minutes.

[Hunter5326]

He (Bernanke) is a traitor,bought and sold!
The Same people who killed Kennedy in 1963 are still in control,and Americans are "dumbed down" to the point of stupidity by the lap dog news media!!

I fear it is too late for us all!

[TriciaLMurphy]

Several years ago (2000?) Ben Bernanke and a bus full of Federal Employees were given a tour of Gettysburg, PA, by Tricia L. Murphy, a Gettysburg Licensed Battlefield Guide. During the two-hour tour she mentioned that her recent historical research suggested there would be a massive global depression between the years 2005 and 2008. In less than 60 Seconds the battlefield guide briefly illustrated historical aspects of the economy and what may happen in the near future if the trends continued.

Ben Bernanke disagreed with her theory and dismissed the idea. Tricia L. Murphy posed this question to Bernanke and the Federal Employees regarding the possibility of a future severe recession ? ?What if I am right? What steps can The Federal Government take NOW to prevent an economic melt down of the US and Global Economy? The hero will be the person who can come up with a strong well thought out economic plan to head off a global recession.?

Ben Bernanke and Tricia L. Murphy concluded the tour with a friendly wager - lunch in 8 years ? for the person who was correct.

Mr. Ben Bernanke, at your convenience, you may buy me that lunch?

Tricia L. Murphy,
Unemployed former
Gettysburg Licensed Battlefield Guide
[e-mail]

PS ? The reports of my death have been greatly exaggerated.

[TriciaLMurphy]

Several years ago (2000?) Ben Bernanke and a bus full of Federal Employees were given a tour of Gettysburg, PA, by Tricia L. Murphy, a Gettysburg Licensed Battlefield Guide. During the two-hour tour she mentioned that her recent historical research suggested there would be a massive global depression between the years 2005 and 2008. In less than 60 Seconds the battlefield guide briefly illustrated historical aspects of the economy and what may happen in the near future if the trends continued.

Ben Bernanke disagreed with her theory and dismissed the idea. Tricia L. Murphy posed this question to Bernanke and the Federal Employees regarding the possibility of a future severe recession ? ?What if I am right? What steps can The Federal Government take NOW to prevent an economic melt down of the US and Global Economy? The hero will be the person who can come up with a strong well thought out economic plan to head off a global recession.?

Ben Bernanke and Tricia L. Murphy concluded the tour with a friendly wager - lunch in 8 years ? for the person who was correct.

Mr. Ben Bernanke, at your convenience, you may buy me that lunch?

Tricia L. Murphy,
Unemployed former
Gettysburg Licensed Battlefield Guide
[e-mail]

PS ? The reports of my death are greatly exaggerated.

[RobertEdwardKroff]

Its not a theory, it's a fact. The term is "rowing the economy." A short row is 10 years and a long row is 20 years. The idea is to coordinate the end of the row stroke on a year ending in 7. Catherine Austin Fitts has spoke about this for years now. Read up on her stuff - its a trip!

[cool1207]

It's very simple, bad decision has bad results, keep making bad decision, will have bad results. If AIG keep making bad business decision, will fail. Fed tried to save US bank system end up to encourage them do wrong without pay. So, has to have better way, that's private ownership or let company fail, failing forward, you can't encourage the child with bad behavior. In U.S., we don't have real famine(food shortage) but we do have politician famine.

[RobertEdwardKroff]

I tried several times to send my email cut & pasted below to [e-mail] . However I get a bounce each and every time, so I am posting it here. My personal information is not of any concern to me being displayed on your site.


Dear, 60 Minutes Staff

I asked on the phone a few days back about Ben Bernanke?s 60 minutes interview comments- "Over the last dozen years or so, enormous amounts of savings has flowed into the United States, and some other industrial countries. That savings has come from China and East Asia. It's come from oil producers. And hundreds of billions of dollars, it has come into our financial system. And, you know, that would be great if we took that money and invested it wisely, and got a high return. But instead, our financial system didn't do a good job. We had a regulatory system that was like a sandcastle on the beach. When you had little small waves just lapping up against the sand castle, everything looked good. But when you had a big breaker come in, suddenly the system wasn't strong enough to deal with it."


You never asked Ben Bernanke for example if ARAMCO is a depositor in the FED, and if so, how much ARAMCO has deposited in the FED approximately, and other entities like it. This is interesting to me because I am writing an objective style nonfiction book on the subject of the most likely depositors in the Federal Reserve: how it all works within the petrodollar recycling system, and so forth :how the west would be much different without such a macro economic dynamic.

How I got started on this topic is when my uncle sometime ago, who is a retired executive from the Saudi state owned oil company, told me this> He said, "ARAMCO is the largest depositor in the FED, and dwarfs the American Government's stake in the bank. No other depositor holds a candle to the Saudi's deposits in the FED." He also said, "Without first producers (energy companies) demanding the currency they trade their product in, the currency we all use each and everyday, would thus have no upstream demand. Without this pull upstream for currency the Federal Reserve Notes the FED issues to the public would be rendered worthless." He also said to me, "Note, taxes and energy paid in what ever is demanded at the final point upstream is money."

I would like to lay it all out in my book, but I lack first quotable sources to do this. So if possible I ask, "Can you please give me access to other parts of Ben Bernanke's interview I may use in my book that did not make the final cut?" This if any such material was even made. Specifically being any material that I could use related to the topic I have described needed for first source documentation which I need for my book outlined within this email.

Sincerely, Robert Edward Kroff
Phone:[phone]
6432 SW Inlet Ave. Lincoln City, OR 97367

[Biggest_Fan]

My neighbor burned his house down smoking in bed, so I took out a loan and built him a new house, then I gave him a bonus for burning his old house down. Now I don't have enough money to send my kids to college. Can Bernanke help me?

[robjr100]

What a lame interview.Why wasn`t Bernanke asked why the Federal Reserve is NOT a part of the government? Why is it run by a bunch of international bankers that answer to no one? Why wasn`t Ron Paul`s bill for total transparity brought up?

These big bankers are big time crooks as it looks like they own Washington DC.

Senator Dick Durbin of Illinois says the "bankers frankly own the place"(the senate) as his bill to save 1.7 million americans their homes.
http://mgx.com/blogs/2009/05/02/olbermann-senate-backs-bankers-over-homeowners/

Check out former bank regulator William Black on Bill Moyers as he explains the flim flam game run on the United States that get`s zero air play on the mainstream media.
http://www.youtube.com/watch?v=Rz1b__MdtHY&feature=channel_page

[brdr4ev]

I am simply appalled at the interview in which I viewed Sunday, And the overall untruths that were aired. The Federal Reserve and Bernanke should not be in charge of our Money supply. The Constitution did not allow for this and questions should have been asked to the unconstitutionality of the supposed Federal Reserve and how it came into existence in the First Place.
This is just typical Main Stream Medias attempt to cover up what is really on the Plate. Let everyone Know the truth heh! . What A Joke. I tell you what you should be covering is Ron Paul's H.R. 1207 and the medias attempt to not let the American People to make concise intellectual decisions . That is why we have a tyrannical Government in place today, that is turning our Great Republic into a supposed Democracy. You keep your Change and I will keep my Mind.

[wakeupamerica4]

I was surprised at the rosy picture you painted of Fed Chairman Ben Bernanke. Apparently Mr. Bernanke is a "wonder child" who apparently deserves only accolades.
Perhaps you forget that Mr. Bernanke sat in on every meeting with the presidents and ceo's of our failed investment banks. He knew well in advance about the huge bonuses given to top executives after having received taxpayer bailout money. He knew and did nothing. He also masterminded giving the hundreds of billions of dollars of taxpayer money to these failed banks. Giving this money to banks with no strings attached....such as requiring them to loan the bailout money to consumers and small businesses. This was bad judgement on his part. The banks took the money and sat on it, making our recession deeper. Mr. Bernanke says he'll know when there are signs of a turnaround when the banks acquire private equity. I say we'll know the signs of recovery when the average person or a small business can easily get a loan.

[inachu1]

Here is the economic plan in the USA.
Drive down the economy slow and hard to the breaking point.
This is done on purpose so once the dollar is about equal to that of India and China then pretty soon everyone will want to buy from USthen off shoring will come back as then when this happens offshoring will become expensive and prohibitive.

It is the worlds banks to try and make all nations economy about or near equal to each other in the terms of equal trade dollar strength. The last country that we will help is africa and in 20 years time soon all emplyers will choose africa aas the country after ASIA and Russia are too expensive to off shore to.

Think the above is lies? examine all you see and the economy will not rebound. it will get worse and worse.
this is not a republican or democrat or independant or a choice made by congress but by the bankers.

[Donna_H]

We watched Mr. Bernake with great hope and were greatly disappointed.

My husband and I each have our own business and we have made a living for the past 20-plus years. The archetypal American enterpreneurs, no? We have no safety net: no one pays unemployment insurance, healthcare, retirement, disability, re-training, vacation or half of our social security requirement for us. This all comes out of our pockets, and we are not even eligible for unemployment. Our businesses have both have suffered significantly in the past year.

For us, and hundreds of thousands like us, the answer is two-fold: create work (and then people will once again hire our services) and provide good, affordable health care NOT tied into one's job.

Why, instead, are we bailing out the bankers/businessmen/speculators who messed us up so badly? They should be made to pay the consequences, not bailed out. Jail? Restitution? Are the regulators culpable? WE would be in jail for fraud if we cheated our clients. No one is bailing out our small businesses.

[wrgoodman56]

Well AIG is his hot button well let me give you a story on that. American General Financial is part of AIG and they have my home loan. They refuse to redo the loan according to the Presdents package. They flat refuse to do any thing after we baled them out so they could keep their jobs. So you want to push another hot button push American General Finacial because I am not the only person that in this with them, my credit union tells me their really bad for this. You guys like hot buttons push this one.
Bill Goodman

[thurston2001]

If Bernanke is so concerned with confidence why not start with putting these masters of the universe in prison, I guess in America if you rob people of thousands you go to prison, but if you rob people of billions you get a big fat bonus. America is doomed.

[hyptia]

This may have been addressed above; I haven't read all the comments, but am impressed that there have been so many. Who decided that Scott would pitch only softballs? The network? Or was it a condition of the Fed? Note that the most important issue was
deftly avoided; namely, the unconscionable negligence of Mr. Libertarian Greenspan, who was shocked, shocked! that the markets did not regulate themselves. Maybe Bernanke felt he had to make nice to his ignoble predecessor. Buthow about at least a passing mention of the repeal of Glass-Steagal (sp?) which made it possible for the greedy, crooked UNREGULATED investment banks to wreck the housing market.

[smillsbc]

Actually, I am a conspiracy theorist and I believe that this whole thing was planned down to the very last detail. These people are smart enough to pretend they were "asleep at the switch". Lies, all lies. Bernanke can do nothing without sanction from those who stand in the shadows. He takes orders just as all puppets do.

The men in the shadows have a plan. Hopefully, we won't be living in China when they are done working their magic.

[josephp5]

I am not so reassured that Bernanke's only concern is for the well being of Main Street, after learning that he has hired former Enron lobbyist Linda Robertson to handle public relations. for the Fed.

[IrqWarVet]

And Bernanke says the Fed is showing more transparency....Really??? When was the last time the Fed was audited by Con-gress??? Been a long while hasn't it, maybe never??? But it will be another long forever, since Sen. Shelby all but killed Ron Paul's bill to audit the Fed.

[IrqWarVet]

What a load of horse manure...Bernanke and Paulson, and Geithner are three thieves in a pod.
What 60 minutes did not explain, but only touched on, is why is the Fed so secretive? Where are those unaccounted for trillions of dollars they have loaned out and no one knows where it's gone.
I don't believe this guy (Bernanke) for a moment, what I do believe is he (the fed) and Con-gress have off loaded a multi-generational debt that will continue to erode our standard of living...except for those who have profited most from this scam.
If anyone believes what they have done and are doing is legal, constitutional and will save us from ourselves...then I have some prime real estate for sale in Baghdad where you can raise your children safely...Gullibility and ignorance is a choice.