WASHINGTON (CBSDC/AP) — Former Federal Reserve chairman Ben Bernanke doesn’t consider himself a Republican anymore.
Bernanke, who was appointed Fed chair in 2006 by former President George W. Bush, made the revelation in his new book “The Courage to Act,” according to Quartz.
“[T]he increasing hostility of the Republicans to the Fed and to me personally troubled me, particularly since I had been appointed by a Republican president who had supported our actions throughout the crisis,” Bernanke wrote. “But it seemed to me that the crisis had helped to radicalize large parts of the Republican Party.”
Bernanke said he “lost patience with Republicans’ susceptibility to the know-nothing-ism of the far right. I didn’t leave the Republican Party. I felt that the party left me.”
Bernanke also said that Democrats “suffered their own delusions, especially on the far left.”
“I view myself now as a moderate independent, and I think that’s where I’ll stay,” he wrote.
Bernanke also delved into the September 2008 collapse of Lehman Brothers, describing it as a “terrible, surreal moment.”
“We were staring into the abyss,” he wrote of the tense negotiations, led by Timothy Geithner, then head of the New York Fed, and Henry Paulson, then Treasury secretary.
Regulators hoped to find a buyer for Lehman and avert what would become the largest bankruptcy in U.S. history, which ignited the worst financial crisis since the Great Depression.
A “blur” is how Bernanke describes the events.
Top executives of major banks took part in the marathon talks with regulators. Bernanke followed the talks from his Washington office, conferring on speaker phone with officials in New York, munching on sandwiches and taking catnaps on the burgundy leather sofa in his office.
“All we can do is put foam on the runway,” Bernanke quotes Geithner as saying, describing measures taken to prevent a fire after a jetliner crash-lands.
Bernanke’s memoir, which he began after leaving the Fed in February 2014, revolves around the crisis in which the government took over mortgage giants Fannie Mae and Freddie Mac and provided hundreds of billions in aid to the biggest U.S. financial institutions.
He notes that the taxpayer-provided bailouts were widely unpopular. He would wince, he said, when he saw bumper stickers saying, “Where’s my bailout?”
But the book amounts to a defense of the bailouts and the Fed’s rescue program for the economy. Late in 2008, the Fed cut its key short-term rate to a record low near zero, where it remains today, to support the economy. It also launched a bond-buying program to try to drive down long-term borrowing rates.
Bernanke argues that without the government’s extraordinary assistance, the Great Recession, as severe as it was, would have been worse.
“The journey was nerve-wracking,” he writes. “But most of my colleagues and I were determined not to repeat the blunder the Federal Reserve had committed in the 1930s when it refused to deploy its monetary tools to avoid the sharp deflation that substantially worsened the Great Depression.”
Bernanke says the Fed’s key goals were to lower interest rates to help the economy, unfreeze credit in the banking system, rescue major financial firms and conduct “stress tests” of the biggest banks to reassure investors.
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