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Ask Ben Bernanke Some Hard Questions

Ben Bernanke, two-term chairman of the Federal Reserve (2006-2014), came to the SALT conference this week in Las Vegas, and was interviewed by Bloomberg editor Erik Schatzker. The interview was not allowed to be televised or streamed, so I expected some fireworks with some tough questions.

Unfortunately, all we witnessed were softball questions that bored the audience to tears. (I saw hundreds checking their cell phones.) Sadly, the audience was not allowed to ask questions. I would have been the first in line.

Here are two questions I would have asked.

In January, 2007, you gave a talk called “Bank Regulation” before the annual American Economic Association meetings, in which you used the words “panic” and “crisis” at least 34 times. You apparently knew trouble was brewing. As the nation’s chief banker, you knew about the irresponsible sub-prime and no-documentation mortgage loans (John Allison’s BB&T bank and other commercial banks refused to participate in this clear violation of the “prudent man” rule in banking). Yet for two years before the mortgage crisis hit (2008), you, as head of the Fed and top bank regulator, allowed this fraud to continue. Shouldn’t you have resigned or been fired for this dereliction of duty?

You passed on discussing whether the banking industry is overregulated as a result of Dodd-Frank, passed in 2010. Since then, not a single community bank has been approved. What steps would you take to re-establish a vibrant banking community?

While I think we can all agree that Bernanke was not the leadership the Federal Reserve exactly needed during a difficult time for the markets, I almost wish that he was the Fed chair right now, just so I could see how he would hold up in a different kind of market environment, and under a very different president.

In 2014, when Janet Yellen took over the reigns of the Federal Reserve, there was a lot placed on her shoulders. Thankfully, regardless of any flaws she might have, Yellen is a cool customer. She plays her cards close to her chest and doesn’t make it easy for markets to guess her next move. She was also willing to propose and champion some very controversial (at the time) policies, such as beginning to hike interest rates after nearly a decade of inaction by the Fed.

Maybe that should’ve been my third question for Ben Bernanke, what do you think of Janet Yellen’s leadership?

Mark Skousen

Mark Skousen, Ph. D., is a professional economist, investment expert, university professor, and author of more than 25 books. He earned his Ph. D. in monetary economics at George Washington University in 1977. He has taught economics and finance at Columbia Business School, Columbia University, Grantham University, Barnard College, Mercy College, Rollins College, and is a Presidential Fellow at Chapman University. He also has been a consultant to IBM, Hutchinson Technology, and other Fortune 500 companies. Since 1980, Skousen has been editor in chief of Forecasts & Strategies, a popular award-winning investment newsletter. He also is editor of four trading services, Skousen TNT Trader, Skousen Five Star Trader, Skousen Home Run Trader, and Skousen Fast Money Alert. He is a former analyst for the Central Intelligence Agency, a columnist to Forbes magazine (1997-2001), and past president of the Foundation for Economic Education (FEE) in New York. He has written articles for The Wall Street Journal, Liberty, Reason, Human Events, the Daily Caller, Christian Science Monitor, and The Journal of Economic Perspectives. He has appeared on ABC News, CNBC Power Lunch, CNN, Fox News, and C-SPAN Book TV. In 2008-09, he was a regular contributor to Larry Kudlow & Co. on CNBC. His economic bestsellers include “Economics on Trial” (Irwin, 1991), “Puzzles and Paradoxes on Economics” (Edward Elgar, 1997), “The Making of Modern Economics” (M. E. Sharpe, 2001, 2009), “The Big Three in Economics” (M. E. Sharpe, 2007), “EconoPower” (Wiley, 2008), and “Economic Logic” (2000, 2010). In 2009, “The Making of Modern Economics” won the Choice Book Award for Outstanding Academic Title. His financial bestsellers include “The Complete Guide to Financial Privacy” (Simon & Schuster, 1983), “High Finance on a Low Budget” (Bantam, 1981), co-authored with his wife Jo Ann, “Scrooge Investing” (Little Brown, 1995; McGraw Hill, 1999), and “Investing in One Lesson” (Regnery, 2007). In honor of his work in economics, finance, and management, Grantham University renamed its business school “The Mark Skousen School of Business.” Dr. Skousen has lived in eight nations, and has traveled and lectured throughout the United States and 70 countries. He grew up in Portland, Ore. He and his wife, Jo Ann, and five children have lived in Washington, D.C.; Nassau, the Bahamas; London, England; Orlando, Fla.; and New York. For more information about Mark’s services, go to http://www.markskousen.com/