Ben Bernanke: An Indispensable Leader?
In my presentations and group coaching work, I'm fond of quoting Charles DeGaulle's observation that, "The cemeteries are full of indispensable men." The point I'm trying to make with that line is that while every leader has unique opportunities and responsibilities in their role that only they can do, no one is personally indispensible. President Obama's renomination of Ben Bernanke for another term as Chairman of the Federal Reserve has me thinking that Bernanke may be the exception that proves DeGaulle's rule. As Robert J. Samuelson writes in the Washington Post today, Bernanke, with his unique background as one of the world's foremost experts on the Great Depression and his willingness to take decisive and innovative action to restore faith in the credit markets, could merit a Time magazine cover headline as "The Man Who Saved the World."
While the praise for Bernanke's reappointment is just about unanimous among economists, there are two basic criticisms of his performance to date. The first is that he didn't see the crisis coming (who, in a position of authority, did by the way?) and, second, that along with then Treasury Secretary Hank Paulson and then President of the New York Fed, Tim Geithner, he allowed Lehman Brothers to fail thereby taking the global economy to the brink. Fair enough, but what gets me about these criticisms is they come with the benefit of 20/20 hindsight. It's easy to see the impact of Lehman 's failure in retrospect. You have to wonder if anyone else would have done a significantly better job of managing all of that at the time.
The great thing about Bernanke as a leader is that while the global credit markets began to freeze, he didn't. He drew on his technical knowledge of the Great Depression and immediately pivoted to exercise what two of my mentors, Harvard leadership experts Ron Heifetz and Marty Linsky would call adaptive leadership. (Check out their new book, The Practice of Adaptive Leadership
It's interesting to think about how a guy whose previous leadership responsibilities were primarily within the faculty of Princeton University pulled all of this off. Looking through the lens of leadership presence that I outline in The Next Level
As this week's renomination suggests, Bernanke's work is far from over. He now has to unwind a lot of what he and his team created to avoid a devastating period of inflation. It's going to be a tough job, but if he continues to lead in the way that he has, I'm optimistic.
Finally, one thing I've learned from blogging about topics like this is that my readers have strong opinions and often radically disagree with me. So, let's hear it. What do you think of Bernanke as a leader? What can we learn from both his positive and negative examples?
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Executive coach Scott Eblin’s goal is to help you succeed at the next level of leadership. Throughout the week, he’ll offer his take on the leadership lessons in the news and his advice on your most pressing leadership questions. A former government executive, Scott is a graduate of Harvard’s Kennedy School of Government and is the author of The Next Level: What Insiders Know About Executive Success.
Bernanke a role model? He not only did not see this was coming but he and the Fed helped severly worsen the recession by raising interest rates to help control inflation.
He didn't see the recession coming because he was too focused on the threat of inflation and because (like Greenspan, Congress and others) he ignored the housing bubble amd other available evidence.
He is lucky to have his job and I will use others as a role model.
Robert Jones Posted Thursday, August 27, 2009 5:40 AMAlthough I have problems with Bernanke, I feel he is doing a good job of adjusting. It's not a new concept to throw money at the problem as the Fed did with the crash of '86 that was considered in contrast with the actions (inactions) of the Fed during the great depression. My concern is the structure as your article stated, none of the leadership saw this coming. There are many of us in the financial industry/government that saw this but no one was willing to challenge the conventional wisdom because of the status of the leaders. Greenspan has acknowledged his failure, then went to rehabilitation mode. Others I have real problems with because they were (past tense) doing so well. Think Michail Milkin, Charles Keating, Ken Lay, and most recently Angelo Mozillo. We do not value integrity as much as raw profits and the Fed only highlights these contradiction. If the Fed were to be responsible then actions taken would seem draconian and be despised by the majority. The loan loss reserve requirements have always been a responsisbility of the Fed and now new rules are being proposed when the existing structure allows for those regulators to be more stringent. The $1T thrown at the problem only brought the lending community near solvent.
Woody Thomas Posted Thursday, August 27, 2009 11:25 AMObama Reappoints Bernanke, Accelerates the Deficit
August 26, 2009 (LPAC)—On the same day that the Obama Administration revealed the disastrous hole blown in the national budget by its criminally insane bailout policy, the President reappointed one of the architects of that disaster, Fed chairman Ben Bernanke, to a second term. Reappointing Bernanke continues Obama's curious track record of continuing the failed policies of the Bush era, while at the same time seeking to blame Bush for Obama's own failures.
The Federal budget deficit is now projected to be $9 trillion over the next decade, Office of Management and Budget Director Peter Orszag said today, in a press conference on the release of the mid-session budget review. That is $2 trillion more than forecast in February, a change Orszag attributed to "a deeper-than-expected recession." The new forecast, as bad as it is, is still based upon the fantasy effects of the non-existent recovery kicking in, producing economic growth of 2% in 2010, 3.8% the year after, and then over 4% for each of the subsequent two years.
The Administration's forecast is also based upon the implementation of its Nazi health-care-cutbacks plan, a point Orszag made explicitly. "To avoiding making the problem any worse, we need to address the key driver of our long-term deficits: health care costs," he said. "The federal government simply cannot be put on a fiscally sustainable path without slowing the rate of health care cost growth in the long run."
Responded Lyndon LaRouche: "In reappointing 'Bailout' Ben Bernanke, Obama is further committing himself to the continuing collapse of the dollar and the removal of the dollar as the world reserve currency. These moves will quickly and inevitably lead to the complete breakdown of the global monetary system, and a breakdown of civilization itself. The Fed is already completely bankrupt, due to the actions of Greenspan and Bernanke, and must immediately be put into bankruptcy protection. We should stop all the bailout programs, take back the bailout money already issued, and put the banks into bankruptcy protection. Without such steps, we face a complete disintegration of the system within weeks."
Dan Ostrowski Posted Thursday, August 27, 2009 12:04 PMHey Robert no one that high up in govt is a role model for anyone but big business...they have forgotten the people until its time to vote...why is it the trade deficit isn't even mentioned anymore? Oh I know we don't make or export anything and they won't compare anything but inflated dollars and percentages...I'd like to see historical charts of what we used to export vs imposts and what it was they exported vs the garbage today...do we make those transistor radios or do the Chinese?
Dahhuh Posted Thursday, August 27, 2009 1:26 PM