WASHINGTON – Federal Reserve Chairman Ben Bernanke called for optimism about the long-term future of the U.S. economy Friday, arguing that the nation has always emerged stronger from periods of economic despair.
In a commencement speech at Boston College’s law school, Bernanke spoke with an unusually personal tone of his own unlikely voyage from son of a small-town pharmacist to Harvard University student to one of the world’s most powerful economic policymakers.
After saying that “the business reporters should go get coffee or something, because I am not going to say anything about the markets or monetary policy,” he did ultimately offer some more serious advice for young graduates entering the worst labor market in memory – and a window into his approach to running the Fed during the crisis.
Bernanke acknowledged the major challenges the nation is facing – the rising health care costs, fiscal imbalances, a savings rate that is too low and an educational system that needs reform.
“There is a lot of pessimistic talk now about the future of America’s economy and its role in the world,” Bernanke said, talk that comes with every period of economic weakness. But he noted that following the Great Depression the nation returned to prosperity, and that the weak economy of the 1970s was followed by two decades of strong growth.
“The economy will recover,” Bernanke said. “It has too many fundamental strengths to be kept down for too long – and the mood will brighten.”
Another reason for graduates to stay optimistic? “Things usually have a way of working out.”
Bernanke argued that a spirit of open-mindedness and intellectual modesty has driven his response to the financial crisis. His academic studies have helped him be prepared for the crisis. But “at the same time,” he said, “because I appreciate the role of chance and contingency in human events, I try to be appropriately realistic about my own capabilities.”
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