THE CONVERSATION
GLENWOOD LAKE ASSOCIATION
NEW ROCHELLE, NY
JANUARY 25, 2012
BEN BERNANKE: WHO IS HE AND WHAT IS HE DOING HERE???

Time Inc.'s Man of the Year

IMAGES OF FEDERAL RESERVE BOARD CHAIRMEN
  • Ben Bernanke, 2006-present (Ph.D. in economics; Professor, Princeton)
  • Alan Greenspan, 1987-2006 (Ph.D. in economics; CEO, Townsend-Greespan, an econometrics consulting company)
  • Paul Volcker, 1979-1987 (M.A., Harvard; doctoral work, London School of Economics; various research and advisory positions
  • G. Willliam Miller, 1978-1979 (lawyer; Director, FRBBos; Treas. Sec.)
  • Arthur Burns, 1970-1978 (Ph.D in economics, Columbia; Professor, Columbia; Pres., NBER)
  • William Mcchesney Martin, Jr., 1951-1970 (B.A., Yale; grad study in economics Columbia; Pres., NYSE) [In 1913, Martin's father was summoned by President Woodrow Wilson and Senator Carter Glass to help design the Federal Reserve Act that would establish the Federal Reserve System on December 23 that same year. His father later served as governor and then president of the Federal Reserve Bank of St. Louis.]
  • Thomas McCabe, 1948-1951 (B.A., Swarthmore; grad. study in economics, Harvard; CEO of Scott Paper Company)
  • Marriner Eccles, 1934-1948 (B.A. Brigham Young; banker, businessperson, demand-side economist)
  • Eugene Robert Black, 1933-1934 (B.A. Univ. of Georgia; banker, businessperson, demand-side economist; Governor, FRBAtl) [Black kept his district afloat by rushing large quantities of cash to banks that were experiencing runs and extending credit to any bank that could offer any asset of value. He kept this policy active through the Great Depression into 1933. He, along with George L. Harrison, the Governor of the Federal Reserve Bank of New York, recommended open market purchases to increase reserves.]
  • Eugene Meyer, 1930-1933 (B.A. Yale; finance Lazard Freres]; business, CEO, Allied Chemical Corp.; bought and restored Washington Post)
  • Roy Young, 1927-1930 (banker - rose through the ranks at FRB Minn and FRBBos) [During his term in office as chairman of the Federal Reserve Board there was confrontation between the Federal Reserve Board and the Federal Reserve Bank of New York under George L. Harrison of how to curb speculation that led inter alia to the stock market boom of the late 1920s. The Board was in favor of putting "direct pressure" on the lending member banks while the Federal Reserve Bank of New York wanted to raise the discount rate. The Board under Young disapproved this step, however Young himself was not fully convinced that the policy of using pressure would work and refused to sign the 1929 Annual Report of the Board because it contained parts favorable to this policy.]
  • Daniel Richard Crissinger, 1923-1927 (B.A., Buchtel College; L.L.B., Univ. of Cincinnati; lawyer, banker)
  • William P. G. Harding, 1916-1922 (B.A., Univ. of Alabama; banker)
  • Charles Sumner Hamlin, 1914-1916 (B.A., Harvard; lawyer, professor, writer)
"He who controls the money supply of a nation controls the nation."
President James A. Garfield

FEDERAL OPEN MARKET COMMITTEE MEETING (in the Eccles Building)

Ben Bernanke

ben

The FOMC

all

The Statement, 25 Jan 2012
New Economic Projections, 25 Jan 2012
FOMC statement of longer-run goals and policy strategy, 25 Jan 2012


THE EQUATION OF EXCHANGE

PQ = GNP = MsVy

TYPES OF MONIES
  • Commodity or full-bodied money
  • Represenative full-bodied money
  • Fiat money
  • Credit money

THE MONEY SUPPLY EQUATION (fractional reserve system)

Ms = mB, where {B = R + C} and m is the expansion multiplier


THE DATA FRED, FRBStL
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