Ben Bernanke, returning to the Princeton University campus where he taught economics for 17 years, offered graduating seniors often humorous advice on subjects ranging from love and success to money and politics in a speech that quoted St. Luke, Lily Tomlin and Forrest Gump.

Bernanke, nearing the end of his second term as Federal Reserve Chairman, put journalists on notice that he would have nothing to say about his future plans, except to point out that his leave of absence from Princeton expired in 2005.

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Dr. Jeff Nunokawa, a Princeton University professor of English, holds the school's ceremonial mace as Federal Reserve Chairman Ben Bernanke leads the processional out of the university's chapel after giving the baccalaureate address Sunday. The Associated Press

He had nothing to say in his speech Sunday about monetary policy, and little to say about economics, except that it “is a highly sophisticated field of thought that is superb at explaining to policy makers precisely why the choices they made in the past were wrong. About the future, not so much.”

Bernanke’s visit stirred speculation among former colleagues at what his future holds after January, when his second term ends. Bernanke, 59, has repeatedly declined to comment on his plans.

“I would love him to return to Princeton,” said Alan Blinder, a Princeton economist and a former Fed vice chairman, who nevertheless said he believes Bernanke probably won’t come back.

Bernanke showed a collegial leadership style at Princeton and honed a scholar’s command of Depression-era economics that helped him battle the last financial crisis, said Elizabeth Bogan, who teaches economics and worked in Bernanke’s department when he was chairman.

“Ben realized that just plain traditionally running the Fed by buying bonds, Treasuries, wasn’t enough,” Bogan said. “I truly believe Ben prevented Great Depression 2.0.”

Mark Gertler, an economist at New York University and co- author with the Fed chairman, said Bernanke may decide to stay in Washington, where he and his wife, Anna, enjoy living, and work at a university or research institute. Gertler said he didn’t know for certain what the chairman is planning.

“I think he’ll decompress,” said Gertler, who said he last saw Bernanke in March. “I know for a fact that he wants to write a book,” Gertler said. “He’s had this wonderful eight years, and I think he’ll want to get it down in print, and I think it’s going to be a fascinating book.”

At a March 20 press conference, Bernanke said he had “spoken to the president a bit” about his future and that he feels no personal responsibility to stay at the helm until the Fed winds down its unprecedented policies to stimulate the economy.

Some of President Barack Obama’s economic and political advisers, who asked not to be identified, have said Bernanke is exhausted and wants to return to private life after spending most of his time as chairman fighting the financial crisis and its aftermath.

A quarterly poll of investors, analysts and traders who are Bloomberg subscribers showed that 34 percent of respondents see Vice Chairman Janet Yellen as the most likely choice to succeed Bernanke when his term ends. The second-most probable is Bernanke himself, at 27 percent.
Fed spokesman David Skidmore declined to comment on Bernanke’s plans.

Bernanke had a lasting influence on the New Jersey campus, where he worked from 1985 until 2002, said Mark Watson, a professor of economics and public affairs at Princeton. Watson had an office near Bernanke’s on the fourth floor of Princeton’s Robertson Hall — near where Nobel Prize-winning economist and occasional Bernanke critic Paul Krugman’s office is now located.

In 1998, Bernanke helped start Princeton’s Bendheim Center for Finance, which focuses on links between financial economics and other fields and offers undergraduate certificates and a master’s program. “It was really Ben who brought it together, made some of the key hires,” Watson said.
During his time at Princeton, Bernanke went from a “rising star” to a “full-fledged star,” said Gene Grossman, the current department chairman. His research delved into the economic history of the Great Depression and examined the effects of monetary policy given already-low interest rates.

Gertler said he and Bernanke co-authored research on monetary policy transmission and the idea of a “financial accelerator,” in which disruptions in financial markets can have “disastrous” spillover effects on the economy. “When we look back at this time, it’s going to be one of the great coincidences of history that the world’s leading expert on financial crises was appointed Fed chairman,” Gertler said.

Bernanke’s role as head of the economics department gave him a chance to demonstrate the leadership skills he would later show at the Fed, Grossman said. Bernanke “was particularly good at listening, being a mediator. He was very practical and non- ideological.”

Bernanke was a mentor to Ph.D students including Jean Boivin, associate deputy minister at Canada’s Ministry of Finance, and Gita Gopinath, an economist who became the first Indian woman to receive tenure at Harvard University in Cambridge, Massachusetts.

“Ben was an exceptional teacher and adviser,” Gopinath said in an email. “He was quite poker-faced, but it was clear that he cared about his students.”

Bernanke moved to Washington in 2002 to become a member of the Fed Board of Governors, a role he held until he became President George W. Bush’s chief economic adviser in 2005. In February of 2006, he replaced Alan Greenspan as Fed chairman after Bush tapped him for the job.

The Fed chief steered the U.S. economy through the deepest downturn since the Great Depression. Unemployment peaked at 10 percent in October 2009, just a month after Obama announced he would reappoint him to the post.

Bernanke backed the rescues of Bear Stearns and American International Group while supporting corporations and small businesses with innovative lending programs that kept credit flowing as banks struggled under a wave of home-loan delinquencies.

Bernanke briefly resumed the role as teacher in his Baccalaureate address, part of an interfaith service held in Princeton’s University Chapel. He told students that while money matters, satisfaction matters more, and that life is unpredictable.

“A dozen years ago I was minding my own business teaching Economics 101 in Alexander Hall and trying to think of good excuses for avoiding faculty meeting,” Bernanke said. “Then I got a phone call.”

The Fed chairman said people with great privilege also have great responsibility.

“Most of us would agree that people who have, say, little formal schooling but labor honestly and diligently to help feed, clothe and educate their families” deserve respect and sometimes help, he said at Princeton’s University Chapel. “They’re more fun to have a beer with, too. That’s all I know about sociology.”

The Fed chairman also suggested that students strive to be “more generous, more loving, more ethical.”

Cynicism is a “poor substitute” for constructive action, he told the students, and politicians in Washington are mostly trying to do the right thing, he said.

“If you think that the bad or indifferent results that too often come out of Washington are due to base motives and bad intentions,” he said, “you are giving politicians and policy makers way too much credit for being effective.”

Bernanke, who has been married to his wife, Anna, for 35 years, told the students that choosing the right partner is crucial. So is calling “mom and dad” once in a while, he said.

“Congratulations, graduates,” he concluded. “Give ’em hell.”

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