Bernanke: Lessons From '30s Averted Worse Crisis

Thursday, 08 Apr 2010 09:07 PM

 

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

Forceful action by policymakers in the United States and abroad during the financial crisis allowed the global economy to dodge a second Great Depression, Federal Reserve Chairman Ben Bernanke said Thursday.

Bernanke, a scholar of the Great Depression, said policymakers learned from the mistakes of their predecessors in the 1930s and used those lessons to fight the crisis that struck with force in 2008.

"Although the economic consequences of the financial crisis have been painfully severe, the world was spared an even worse cataclysm that could have rivaled or surpassed the Great Depression," the Fed chief said in remarks prepared for a speech to the Center for the Study of the Presidency and Congress.

At the start of the Great Depression, the Fed and the administration of President Herbert Hoover erred by failing to act aggressively to address problems, including weeding out weak banks. And the Fed ended up tightening credit too soon.

Bernanke rolled out bold and unprecedented programs to help ease credit clogs and spur lending. He coordinated emergency relief actions with central banks overseas. He slashed a key lending rate to a record low near zero, where it remains.

The Fed chairman has won praise from some on Capitol Hill for his handling of the crisis. But he has been criticized by lawmakers and others for failing to detect problems leading up to the crisis.

Bernanke cited four lessons learned from the financial collapse of the 1930s:

  • Economic prosperity depends on financial stability.
  • Policymakers must act forcefully and creatively.
  • International crises demand an international response.
  • History is never a perfect guide.

The Fed chief made his remarks at a dinner where he was presented with the Hamilton Award for government leadership.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Most Believe Santa Claus Is a Republican

Monday, 22 Dec 2014 12:51 PM

He probably doesn't have time to vote, what with all that toy-making, reindeer-steering and chimney-dropping, but did yo . . .

Obama Set to Clash With Congress on Keystone, Cuba

Monday, 22 Dec 2014 12:37 PM

In his final press conference of the year, President Obama indicated that he plans to take on the new Republican-led Sen . . .

Christie Preps for 2016, Has Late Nights on Foreign Policy

Monday, 22 Dec 2014 12:02 PM

It's after 9 p.m. on a Sunday night in late November and New Jersey Gov. Chris Christie is deep into a conference call,  . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved