Tuesday, October 25, 2005

Bernanke to succeed Greenspan as Fed chairman

From the Times:

President Bush [yesterday] nominated Ben S. Bernanke, a senior White House adviser and a highly regarded academic economist, to succeed Alan Greenspan as chairman of the Federal Reserve Board.

If confirmed by the Senate, Mr. Bernanke, 51, will assume the most powerful economic post in the United States -- and arguably the world -- with a promise to continue the basic policies of a man who achieved a nearly mythic reputation during 18 years at the helm of the economy...

Mr. Bernanke's nomination was in many respects the economic equivalent of Mr. Bush's nominating John Roberts for chief justice of the Supreme Court: a candidate with sterling academic credentials, no taint of cronyism and a sphinx on key political issues.

"Ben Bernanke is the right man to build on the record Alan Greenspan has established," Mr. Bush said in a brief statement at the Oval Office with Mr. Bernanke and Mr. Greenspan at his side.

Mr. Bernanke noted that the Fed would "continue to evolve" in the years ahead. But in a bid to soothe anxieties in financial markets, he emphasized his intention to preserve "continuity."

"My first priority will be to maintain continuity with the policies and policy strategies during the Greenspan years," Mr. Bernanke declared.

Reactions thus far are overwhelmingly positive. Even Democratic stalwart Senator Chuck Schumer of New York, hardly one to support Bush's nominees without a fight, has already come out with a favorable response: "We need a careful, non-ideological person who understands that the Federal Reserve's main job is to fight inflation and Ben Bernanke seems to fit that bill."

My initial reaction is similarly favorable (although I reserve the right to add nuance to it going forward).

Maybe Bush is going through a good-bad alternation for appointees and nominees. Where Michael Brown and Harriet Miers are BAD, John Roberts and now Ben Bernanke are GOOD. Regardless, it's good to see that Bush didn't succumb to cronyism here. With the health of the American (and global) economy at stake, he seems to have picked a stable rudder in the mold of Greenspan himself.


Around the blogosphere:

In the middle, Dave Price of Dean's World "welcome[s] our new fiscal overlord". Well put.

Dave Schuler has a good round-up at The Glittering Eye.

The Wall Street Journal has some reaction from "economist bloggers".

Tyler Cowen at Marginal Revolution lists (and analyzes) five of Bernanke's "major contributions," including inflation targeting.

On the right, Professor Bainbridge: "When President Bush nominated his personal lawyer to the SCOTUS, some wags wondered whether he would nominate his personal banker to replace outgoing Fed Chairman Alan Greenspan. Instead, the White House has put forward Ben Bernanke, who is a very credible choice. Indeed, in many respects, Bernanke is everything Miers isn't."

Celebrity-economist (and trickle-down blowhard) Larry Kudlow is similarly impressed (see also here).

So is libertarian Virginia Postrel at Dynamist.

Think Progress, however, is rather skeptical. So, too, is DHinMI at The Next Hurrah.

Also on the left, Steve Soto at The Left Coaster asks a great question: "Yikes, did Bush just make a reasonable choice for a change?"

Yes, it seems so. Obsidian Wings agrees, adding: "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."


Back on the right, Outside the Beltway expresses ideological concern: "Bernanke is seen as being more moderate than Greenspan and that could be a bad thing. The appeal of Greenspan is that he was seen as an inflation hawk to the point that he'd bring about a recession to control inflation. A more moderate chairmen [sic] might be seen as being more willing to use monetary policy to affect the business cycle vs. simply wanting to reign in inflation."

Which, in my view, would seem to recommend him. What's wrong with a moderate guiding the Fed?

See also Brad DeLong ("Bernanke is a demand-sider"), Daniel Drezner, Bradford Plumer, The Volokh Conspiracy, and the ever-sensible Justin Gardner at Donklephant.

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