Backstory: Banking on Bernanke
BOSTON — When Ben Bernanke was in his early teens, he was hooked on statistics - not about inflation or GDP but about strikeouts and RBIs. He and a friend, Nathan Goldman, spent countless hours sitting on the floor in the Bernanke home, first inventing and then playing a game that simulated the play-by-play action of professional baseball games.
A card represented each player. The competition, where a dice roll could result in a groundout or a run-batted-in, was intense. "They played to win," recalls Philip Bernanke, Ben's father.
But when his little sister, about 6 years old, wanted to get involved, Ben didn't shove her aside. He let her pick a player she could call her own: Dodger pitching ace Sandy Koufax.
This preoccupation of a boy in small-town South Carolina reveals some enduring aspects of the man who is now launching into a four-year term as chairman of the Federal Reserve, arguably the free world's most powerful unelected official.
At an early age, Ben Shalom Bernanke matched a typical teenager's love of sports with a drive for intellectual mastery. His algebraic talent for modeling a baseball league would grow, over time, into an economist's craft of modeling the national flow of goods, services, and money.
Along the way, his character was shaped not only by his love of baseball but also by a close African-American friend, a nurturing family, and a job waiting tables at a raucous roadside restaurant. At every step, from grade school to the halls of Harvard University, his talents and self-confidence have pushed him to the front of the class.
"He believes in himself," says Sharon Bernanke, his sister. "He's very direct.... Ben's just always been Ben."
Unlike a number of past Fed chairmen, he does not arrive on the job with a long track record as a public figure - either in government or in the corner office. Alan Greenspan came to the Fed as a well-known Wall Street economist who had advised President Nixon. Paul Volcker headed the prestigious Federal Reserve Bank of New York. G. William Miller was CEO of Textron.
By contrast, Dr. Bernanke is relatively new to the circles of the world's policymaking elite. His rise from Dillon, S.C. - a quiet town of 6,300 - has run along a largely academic track. That changed in 2002, when President Bush named him to one of seven slots on the Federal Reserve Board. Then, last June, he became chairman of the president's Council of Economic Advisers.
But if he has spent little time in the limelight, Bernanke is hardly unprepared for the rigors of his new role. His recent post as a Fed governor has put him at Mr. Greenspan's side for three years, helping to shape the Fed's interest-rate policies. His academic research has focused on monetary policy and also on the roots of history's largest financial crisis, the Great Depression.
Equally important, friends and colleagues say, he brings crucial personal qualities - including an ability to listen and to lead - that have been developing since his youth in Dillon. Bernanke's father and uncle ran the pharmacy in town, and the family was one of a handful who kept a small local synagogue going. "He comes from a kosher household," Philip Bernanke says. "In the wilds of South Carolina, that's not easy."
From the beginning, Bernanke not only excelled - going to Washington as an 11-year-old spelling champ - but also tried to plumb difficult issues. When he got to high school, racial segregation was just ending. From his vantage point as a saxophone player in the marching band, he wrote a novel about an integrated football team.
"He was very proud of it," says Kenneth Manning, a friend from Dillon who had attended the town's other, all-black, high school.
When he wasn't in school, Bernanke worked construction and waited tables at South of the Border, a kitschy tourist stop that uses countless billboards to reel in Florida-bound vacationers. In his free time, he would shoot baskets with his younger siblings, Seth and Sharon.
But he also began thinking of opportunities beyond Dillon. Dr. Manning provided a crucial nudge. The two shared a common bond, "a burning desire to expand intellectually," says Manning, now a historian of science at the Massachusetts Institute of Technology (MIT).
Manning was already at Harvard. In visits to the Bernanke home, he helped persuade Ben's reluctant parents that their son should go, too. Manning also offered brotherly counsel to his friend. Bernanke didn't merely listen, Manning says. "He clearly digested what you said and thought about it."
Even in the Ivy League crowd, Bernanke stood out, graduating Harvard with top honors in 1975. He discovered his passion for economics, and for a Wellesley College student, Anna Friedmann, whom he married while in graduate school at MIT. "They are very down-to-earth," says Mark Gertler, a New York University economist. "His wife is a wonderful person. She'll keep him on an even keel."
He describes the Bernankes as people who value their private lives after the workday is over (Anna is a Spanish teacher) and are unlikely to spend as much time on the Washington social circuit as Greenspan did. They have two grown children, Joel and Alyssa.
Although friends say Bernanke now follows the Washington Nationals, he rooted for the Red Sox while in Boston. These were years of rising hopes and epic letdowns. Fellow economist Jeremy Bulow recalls that Bernanke made it to Fenway Park for one of the darkest days in New England sports history: the one-game playoff in 1978 when the Sox lost to the New York Yankees on shortstop Bucky Dent's improbable home run.
Even as he witnessed dismal moments at Fenway, Bernanke was exploring the dismal side of his science - researching the Great Depression. After earning his PhD in 1979, he taught at Stanford, then settled in at Princeton for nearly two decades. He cowrote a popular textbook, but also seemed interested in leaving a mark in the real world.
Around the time he was named a Fed governor in 2002, he explained the career move to his dad this way: He wanted to do something for his country. In an earlier era, others in his generation had fought in a war. What he could give now was his talent as an economist.
Though Philip Bernanke knew his oldest son had high ideals, the comment surprised him. "I didn't realize he was really that patriotic," he says.
Wednesday, in the wake of his Tuesday confirmation by the Senate, Bernanke will begin a tour of monetary duty that promises to test his many talents. Those who have worked with him have few qualms. "He's good at figuring out the best solution" to a given problem, says Dr. Gertler. "He's open to any solution that works.... But I'll say this: He's very tough."