Turning charisma into cash: Bernanke's 40 minutes
Abu Dhabi, March 5, 2014
By Jonathan Spicer and Mirna Sleiman
Ben Bernanke earned more in 40 minutes on Tuesday than he made all of last year as head of the US Federal Reserve.
Bernanke was paid at least $250,000 for his first public speaking engagement, in Abu Dhabi, since stepping down in January, according to sources familiar with the matter. That compares to his 2013 paycheck of $199,700, and the appearance was only the first of three around the world this week.
Bernanke's public post-Fed debut was a departure from the private audiences that his predecessor Alan Greenspan addressed shortly after he handed over the central bank's reins in 2006. In his remarks, Bernanke recounted the Fed's response to the 2007-2009 financial crisis, an issue he is exploring for a book he plans to shop around to publishers.
In hitting the speaking circuit, Bernanke is following a well-trod path of top public servants cashing in on the demand for the insights they can offer. In the case of a one-time Fed chairman, those insights could potentially be market-moving.
And given that his successor, Janet Yellen, has vowed to stay the course he set, investors could view him as a weather vane for the world's most powerful central bank.
"He will obviously be enjoying the fruits of the free market," said Jan Baran, a partner and head of the election law and government ethics group at Washington law firm Wiley Rein. "He will personally experience supply and demand."
Lawyers and agents say Bernanke, 60, should be able to command around $250,000 per speech for a while to come.
The paycheck "sounds reasonable to me," said one speaking-circuit agent who did not want to be named. Bernanke could have a "very long shelf life," he added.
While the fee launches him into the upper echelons of sought-after speakers, it leaves him well short of former President Bill Clinton - the gold standard of Americans turning charisma into cash - who has, by some estimates, earned two or even three times that much for some appearances in recent years.
"He's free to offer his own views either historical or forward-looking," said Baran, when asked about the ethics of Bernanke cashing in on his eight years as Fed chairman. "Nothing sounds illegal or unethical and in fact it sounds fairly routine."
As Bernanke joked on Tuesday: "I can say whatever I want."
Not always, as his predecessor learned.
Greenspan drew criticism for giving high-paying investors a potential leg up on their competitors with closed-door remarks about interest rates shortly after he left office, and for comments in March 2007 on the probability of a US recession that roiled financial markets even as Bernanke was reassuring investors about the outlook.
At the conference sponsored by the National Bank of Abu Dhabi, attendees paid $2,000 each to listen to Bernanke and other speakers, including former US Treasury Secretary Lawrence Summers. Greenspan garnered a similar fee in the UAE capital in 2008.
Bernanke, who is now a distinguished fellow at the Washington-based Brookings Institution think-tank, did not discuss monetary policy, and only brushed on prospects for the US economy. Instead, he chose to elaborate on his experience as chairman, acknowledging the Fed could have done more to battle the financial crisis.
Questions from the audience were relatively soft, leading to a discussion about family and baseball. On Wednesday, Bernanke speaks at a Johannesburg forum hosted by the financial firm Discovery Limited, and on Friday he will discuss the US energy boom at a conference hosted by Siemens and IHS in Houston.
For his planned memoir, Bernanke is being represented by Robert Barnett, the Washington-based attorney who also handled Greenspan, according to a source familiar with the situation. Bernanke plans to meet publishers soon to discuss the book.
While it is unclear how large of a cash advance Bernanke is seeking, Greenspan clinched $8 million. - Reuters