Ben Bernanke nominated to replace Greenspan
Posted by Eliot Weinstein on October 24, 2005
President Bush has nominated Ben Bernanke to replace Alan Greenspan as the Chairman of the Federal Reserve Board of Governors. Bernanke is the Chairman of the White House’s Council of Economic Advisers and a former member of the Fed Board of Governors. He is considered to be one of America’s foremost monetary theorists, surpassed only by Greenspan and Greenspan’s predecessor Paul Volcker.
After the farce that is the Harriet Miers nomination, Americans of all political stripes should be breathing a collective sigh of relief. While his personal party affiliation is Republican (as was Greenspan’s before his nomination to the Fed), Bernanke is an academic economist, not a political operator, and it is highly unlikely that he would risk the nation’s economic stability for short-term political gain. Bernanke also has stronger credentials in matters of monetary policy than the others rumored to be on the president’s list to succeed Greenspan. For example, R. Glenn Hubbard, a Columbia professor and former Council of Economic Advisers Chairman, is an expert in the field of corporate finance, but he is less distinguished in monetary matters than Bernanke. If confirmed, Bernanke is likely to broadly continue Greenspan’s policy choices. Two important differences, which can be inferred from his time as a Fed governor, are that Bernanke possesses a greater understanding of the symbolic (i.e., media) importance of the Fed Chairman, and that he has a desire to increase the amount of debate and dissent during Fed meetings. As many people consider the Fed Chairman to be the second most powerful person in the US government, the ability to avoid media frenzy and the willingness to address criticism are qualities that should serve Bernanke very well.
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