Monday, February 3, 2014

Brookings Becomes New Shadow Fed

The rumors can be put to rest.  It is now official.  Brookings has scored one of the hottest people in town - former Federal Reserve Chairman Ben Bernanke.

Brookings officially announced today that Ben Bernanke will join the Economic Studies program as a Distinguished Fellow in Residence, effective February 3, 2014.

The think tank says that Bernanke will be affiliated with the Hutchins Center on Fiscal and Monetary Policy, which launched on January 16, 2014 with a $10 million grant from the Hutchins Family Foundation.

The Hutchins Center is directed by David Wessel (who as a reporter used to cover Bernanke), but this does not mean that Bernanke will necessarily report to Wessel, who himself just joined Brookings in December 2013.  Here is what Mr. Wessel says about Bernanke joining the think tank.

BloombergBusinessweek wonders when the Brookings-Bernanke negotiations started:
The lightning-quick naming of Bernanke raises the question of how long ago negotiations with Brookings began. Wessel, whose appointment as director was part of the announcement of the center’s formation on Dec. 4, has a well-known and long-standing relationship with Bernanke. He wrote a 2009 history of the financial crisis called In Fed We Trust: Ben Bernanke’s War on the Great Panic. As the title suggests, it was one of the more positive appraisals of Bernanke’s performance.
Brookings spokeswoman D.J. Nordquist said in an e-mail, “Dr. Bernanke made arrangements with Brookings during the final days of his term at the Federal Reserve.” She said Wessel was in a meeting and not immediately available.

In a press release Brookings notes its strong ties to the Federal Reserve Board:
Brookings has a long history with the Federal Reserve Board. Brookings Board of Trustee members Frederic Delano and Paul Warburg were original members of the Federal Reserve Board of Governors in 1914. Longtime Fed Chairman William McChesney Martin, Jr. (1951-1970) was a member of the Brookings Board of Trustees from 1970-1997. Alice Rivlin and Donald Kohn, both of whom served as Vice Chair of the Federal Reserve, are Senior Fellows in the Economic Studies Program; Edward Gramlich and Nancy Teeters, both Federal Reserve Governors, were Senior Fellows in the Economic Studies. Lael Brainard, currently a nominee for Governor, was a Brookings Vice President. In addition, Former Brookings President Bruce MacLaury (1977-1995) was the President of the Federal Reserve Bank of Minneapolis (1971-1977).

The Washington Post's Wonkblog says that Bernanke's move to Brookings solidifies the think tank's influence.

Readers of Think Tank Watch already knew last year that Bernanke would probably go to Brookings.

So, how much will Ben Bernanke be paid at his new think tank gig?  Think Tank Watch is keeping quiet on that, but we note that he was making around $200,000 at his Fed Chair position.  Brookings President Strobe Talbott made around $415,000 according to the most recently available public records.

Bernanke is not the only "famous" person to join Brookings in the past few weeks.  In December 2013, Cameron Kerry, younger brother of Secretary of State John Kerry, joined Brookings as a Distinguished Visiting Fellow.  Kerry is the former Acting Secretary and General Counsel of the Department of Commerce.

Here is a Muckety map of Brookings' strong ties to the Fed.

Think Tank Watch prediction: Ben Bernanke helps bring Janet Yellen to Brookings in 2022.