WASHINGTON — There were a few anachronistic moments in professor Ben S. Bernanke’s lecture to college students at George Washington University on Tuesday. But in his disquisition on the history of central banking in the United States, he was clearly
WASHINGTON — There were a few anachronistic moments in professor Ben S. Bernanke’s lecture to college students at George Washington University on Tuesday. But in his disquisition on the history of central banking in the United States, he was clearly speaking not only to the past but also to the present.
The Federal Reserve chairman and longtime college professor at Princeton and other universities gave an hour-long, 50-slide lecture on the “Origins and Mission of the Federal Reserve” to about two dozen undergraduates in the afternoon. It was billed as part of Bernanke’s campaign to make the famously opaque central bank more open in the wake of its extraordinary interventions to help prop up the U.S. economy.
Fighting against criticism that it too often acts in secret, the Fed has been publicizing more detailed guidance on its economic projections, and Bernanke has been making more television appearances and even periodic press conferences.
The campaign was evident in Room 651 of Duques Hall, where Bernanke didn’t just describe the history of the Fed, created by Congress 99 years ago. He gave justifications for its existence that counter critiques of the central bank in recent years, most notably from Rep. Ron Paul (Texas), a Republican presidential candidate.
Bernanke spent more than a few minutes — and four slides — explaining why returning to the gold standard, which Paul has advocated incessantly, would be unfeasible and imprudent.
“There’s just not enough gold to meet the needs of a worldwide gold standard,” the Fed chairman said. “But more fundamentally than that, the world has changed.”
“In a modern world,” he went on, “the commitment to the gold standard would mean that we are swearing that under no circumstances, no matter how bad unemployment gets, are we going to do anything about it using monetary policy.”
Most of Bernanke’s lecture dealt with the past, but apparently some of his pop culture references were a little old for this crew of students, many of whom were born in the early to mid-1990s. Bernanke asked whether the students had seen the film “It’s a Wonderful Life,” the famous 1946 movie in which a bank panic plays a starring role — and virtually no one raised a hand.
Later, the Fed chairman brought up Life magazine. “You probably never heard of that. It was a very famous magazine,” he deadpanned.
Bernanke spent time describing how the Fed was created and its evolving role in stemming financial panics, as well as the mistakes of some of his predecessors. A second lecture on Thursday will focus on central banking since the Depression; a third will look at the recent financial crisis; and a fourth will tackle the Fed’s response to the recession and slow recovery.
“This is what I used to do before I got into this line of work,” Bernanke said as he opened the class Tuesday.
