Personalities shape outcomes: Greenspan & Bernanke

Both are former saxophone players. One played with Stan Getz, the other in the school marching band.

Greenspan is the applied economics guy, having been a ‘practitioner’ in both government and the private sector during all his post-saxophone playing days.

Bernanke is the academic theoretical researcher, having lived until 2002 inside the ‘Ivory Tower’.

Both define themselves. Greenspan in a short ironic sentence:

“Since I´ve become a Central Banker, I´ve learned to mumble with great incoherence. If I sound unduly clear to you, you must have misunderstood what I said”.

Bernanke in a co-authored op-ed in January 2000:

“More transparency and accountability would help keep the Fed on track, and a more open Fed would be good for financial markets and more consistent with our democratic political system”.

In short, Greenspan favors ‘opacity’ while Bernanke strives for ‘transparency’.

‘Opacity’ gave us the “Great Moderation”. ‘Transparency’ the “Great Recession”.

Greenspan, the ‘practitioner’ learned from his mistakes. Bernanke, the ‘academic scribbler’, thought he learned from historical assessments.

Greenspan has been ‘demonized’ after leaving for having set the stage for ‘Armageddon’; Bernanke is often hailed as a hero for helping avoid a repeat of the “Great Depression”.

Now, if you thought all this is very confusing, you are correct!


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