Review Essay

Big Ben

Bernanke, the Fed, and the Real Lessons of the Crisis

In This Review

The Courage to Act: A Memoir of a Crisis and Its Aftermath
The Courage to Act: A Memoir of a Crisis and Its Aftermath
By Ben S. Bernanke
W. W. Norton & Company, 2015, 624 pp. Purchase

The biggest revelation offered by Ben Bernanke’s memoir of his time as chair of the U.S. Federal Reserve is just how much the public, the media, and especially elected officials have misunderstood the real lessons of the 2008 financial crisis and the subsequent Great Recession—events that defined Bernanke’s tenure, which began in 2006 and ended in 2014. Bernanke spends much of the book justifying what should be self-evident: that the risk of a second Great Depression called for precisely the sort of active monetary policy that he and his colleagues at the Fed pursued.

As Bernanke makes clear, the crisis was a traditional financial panic of the sort that led to the creation of the Fed in the first place. Bernanke and his colleagues responded correctly to the challenge, rapidly cutting interest rates to zero and then purchasing assets, primarily U.S. Treasury bonds, on a large scale, a

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