Bernanke For Fed Chair

by hilzoy

WaPo:

"President George W. Bush was expected to announce on Monday that he has picked top economic adviser Ben Bernanke to succeed Federal Reserve Chairman Alan Greenspan, a knowledgeable source said. (...)

Bernanke is chairman of Bush's Council of Economic Advisers. He served on the Fed's Board of Governors for nearly three years before moving to the White House in June. (...)

Bernanke, a highly regarded monetary economist, has advocated steps toward greater policy transparency at the Fed and is a long-time advocate of inflation targets. At the Fed, he argued the central bank could help cement its inflation-fighting credibility by putting a number on its definition of price stability."

Brad DeLong, Kash at Angry Bear, Tyler Cowen, Andrew Samwick, and Max Sawicky all think he's a good choice; who am I to argue? Everyone says he's very non-partisan, which is really, really important in a Fed chair (and no, I am not just saying this because a Republican is in power. The independence and impartiality of the Fed is crucial, and was, imho, badly damaged by Greenspan's idiotic support of the Bush tax cuts.)

Besides, you have to love this story, from behind the WSJ subscription wall:

"Until he joined the CEA, Mr. Bernanke had little contact with Mr. Bush. Though a Republican, he was decidedly nonpartisan. Somewhat shy and often underdressed, he is the antithesis of the power-suited business executives that Mr. Bush has preferred for top economic policy posts.

But he appears to have earned Mr. Bush's trust and perhaps even affection. Earlier this year, Mr. Bush gently chided Mr. Bernanke for showing up at an Oval Office meeting wearing a dark suit with tan socks, according to several people familiar with the incident. The next day, Mr. Bernanke showed up early for another meeting with Mr. Bush and distributed tan socks to the other meeting's participants. When Mr. Bush arrived, all were wearing tan socks."

I think we have Harriet Miers to thank for this appointment. When the Bush administration decides to appoint someone who is eminently qualified and will win widespread support, it can do a very good job. It's when Bush decides to go with his gut that we get people like Miers and Kerik. Luckily, he seems to think he's in no position to go with his gut just now, and given the importance of the Fed Chair's job (especially in a time of real economic peril), that's a huge relief. Thanks, Harriet.

Comments

[Ugh]

The business community would have crucified him had he chosen an unqualified lacky.

[Jackmormon]

Here's a link to an April 1005 speech Bernanke gave. I was prepared to make fun of it because of the title ("The Global Saving Glut and the U.S. Current Account Deficit"), but it's a pretty impressive and nuanced analysis.

Short version: all of those lender nations have really good reasons for investing surpluses in expanding economies, and maybe they should consider putting their savings in developing countries rather than in the US. Oh, and balancing the federal budget, while not a panacea for trade-imbalances, is probably a good idea, long-term.

[Phil]

Here's a link to an April 1005 speech Bernanke gave.

"On The Manye and Varyed Types of Metales and Jem-stones Which may Serve as a Meanes of Eckschanging Wealthe"

[Jeremy Osner]

Phil is rocking and rolling on sundry threads today.

[Kevin Donoghue]

Thanks, Harriet.

And best wishes for your future career.

[Jackmormon]

Man, I feel bad for Miers. Withdrawing from the nomination was the best course, but how humiliating. It's Bush and Rove's fault, of course.

Now, how much credit does Harry Reid deserve? How much of this could he possibly have predicted?