HENSARLING: My last quote and my first question, quote, "Uncertainty is seen to retard investment independently of considerations of risk or expected return. The introduction of uncertainty can be associated with slack investment, resolution of uncertainty with an investment boom." You know who wrote those words, and, yes, it is a trick question.

BERNANKE: I'm sure it was I who wrote those words. That was my -- it should have been, anyway, since that was my 1979 Ph.D. thesis was on uncertainty in investments. Maybe it wasn't me. I don't know.

HENSARLING: My notes here said 1980, but it's a very good memory, Mr. Chairman. Do you agree or disagree with yourself?

BERNANKE: Personally, I think that was an excellent thesis.

From the Q&A session

I do think that economics, it’s not music or math. It’s not something that’s valuable for its own sake. Economics is only useful to the extent that it helps people — that it helps the economy. I spent my entire career looking at monetary policy, macroeconomics, financial crises and their effects on the economy. Through those studies I’ve learned some things that I hope will be helpful, or are being helpful, in the current environment. I view this as a wonderful opportunity to use what I know, to serve my country, to try to serve the American people. I can’t deny that there have been some dark days and some difficult nights, difficult weekends, but I don’t regret it and I’m very gratified that I am able to use whatever skills, personal abilities that I have to make a difference. Again, I think that should be the goal of every economist.

Bernanke's response to a question about whether he regretted his decision to join the Fed, as reported by the Wall Street Journal

Stanley Fischer said that advances in economics have had a huge impact on central banking...

Volcker announced his dissent from this party line. One problem was that economists changed their views so much! In 1950s, economists thought a little inflation was OK to secure full employment. Then came the Austrian School, and then came the monetarists, neo-Keynesians, etc.

 To be sure, it was important to have economists around but “you don’t have to have them on the Board”. They may be brilliant but that does not make them into good central bankers. This may be because much of what a central banker does is boring to economists – writing memos, giving speeches, talking with MPs and Congressmen. A central banker needs experience, judgment, breadth and above all guts. The central banking profession is not equivalent to or an extension of economics profession:

 “When I looked at Ben Bernanke’s CV, I was most impressed; why? Because I saw he had been head of his local school board - now that’s a really valuable qualification for a central banker. Then I read that Bernanke had said that inflation was something that central bankers had brought to the attention of economists rather than the other way round and that also impressed me!”

As reported by Central Banking Publication's "Newsmakers" coverage

Ben has a charming sense of humor ... He is not only prodigiously smart, but I think that the best thing that happed to him is that he served on a school board in New Jersey ... It allows him to run a meeting with harmony and results.

From Q&A as reported by Market News International

I think he has been battled hardened. I think we all have been battle hardened. We found that the pipes in the great sprinkler system we call the economy were clogged  ... We needed to change our tool kit ... I think his pragmatic hardball approach has been very
productive.

From Q&A as reported by Market News International

Timothy F. Geithner, president of the Federal Reserve Bank of New York, and a close Bernanke ally, defines the Fed chief’s “doctrine” as the overpowering use of monetary policies and lending to avert an economic collapse. “Ben has, in very consequential ways, altered the framework for how central banks operate in crises,” he said. “Some will criticize it and some will praise it, and it will certainly be examined for decades.”

I am tempted to think of him as somewhat Buddha-like. He’s developed a serenity based on a growing understanding of the hardball ways the system actually works. You can see that it’s no longer an academic or theoretical exercise for him.

These new facilities are Ben’s initiatives. He has been willing to take a fresh look at how the system works and press the boundaries in a thoughtful way.

But not only have our goals been the same, I think the way we’ve come together has been similar. Ben is smart, creative, open to new ideas and always looking around the next corner.

Ben is one of these guys who is outwardly calm and has inner stomachaches.

He’s under a tremendous amount of strain.

To start with, central bank credibility and low and stable inflation expectations are of critical importance. Earning that confidence is the most important thing the Fed can do in dealing with shocks as they occur. If the Fed doesn’t have that underlying confidence, then all sorts of things can go wrong and, indeed, the Fed may find itself willy-nilly taking policy actions intended to maintain or restore credibility rather than dealing with the current problem, whatever it might be. So, most of the work in dealing with the crises comes before they even happen. Where the Fed is now is a consequence of earning that credibility starting with Paul Volcker and then dealing successfully with a whole series of issues during the Volcker, Greenspan and now Bernanke eras.

To be sure, the Committee looks to the Chairman to provide strong leadership.  The Chairman's special role is partly legal and structural--as the chair of the Board and the Committee and as the Committee's representative in front of Congress where the FOMC is held accountable for its actions... But in my experience, the other members of the Committee are also important for good policy.  Effective Chairmen cannot operate independently of the sentiment on the Committee; ultimately, the authority of the Chairman rests on his ability to persuade the other members of the Committee that the choices they are making under his leadership will accomplish their objectives.  The better the collection of individuals he needs to persuade, the better the policy is likely to be. 

...

Could the functioning of the FOMC be improved?  Certainly, and Chairman Bernanke has moved to further utilize the diverse views of the FOMC members, while maintaining the leadership necessary to keep this diverse group headed in the appropriate direction. 

Poole said FOMC meetings have changed since Ben Bernanke took the helm at the Fed. Unlike the former chief, Alan Greenspan, Bernanke only comes out with his views toward the end of the meeting. It is also possible to make comments during the presentations of other colleagues. 

"That offers more time for discussion when thoughts are fresh," Poole said.

From a Dow Jones summary of a FAZ article

Chairman Bernanke has encouraged open discussion, encouraged us to question and challenge each other's positions and encouraged open dialogue within the meeting. I think he's also encouraged us to express fully our views on policy before he proposes a given policy proposal. He has moved in the direction of greater unscripted exchange of views, and that's been good.

One area where {Bernanke} has differed with Chairman Greenspan is on how to define "price stability." Of course, both see price stability as a prime objective of policy. But for Chairman Greenspan, the definition has been behavioral—that is, he would say that we have achieved price stability when inflation is low enough that it does not affect people's economic decisions. In contrast, well before Bernanke was nominated to be Fed Chairman, he said that he would like to see the establishment of a numerical objective for price stability. If you're interested in getting a full articulation of his views, I'd recommend you take a look at a speech he gave in October 2003 at a conference at the St. Louis Fed. Since his nomination, he has said that he would not institute such an approach without a consensus among FOMC members.