Decius wrote:

Mike the Usurper wrote:

Decius wrote:

President Bush nominated Ben S. Bernanke, his top economic adviser, to replace Alan Greenspan as chairman of the Federal Reserve Board.

Everyone seems to be quietly pleased with this nomination. This is a relief.

Well he comes qualified, Stanford, Princeton, London School of Economics. But, economic theory is important as well. Is he a Keynesian? Milton Friedman supply-sider? Loose money? Tight money? I have seen notes about a paper by him and Alan Blinder about important parts of the monetary chain, but haven't found the paper itself.

Based on what I could find, he looks to be a solid choice to replace Emperor Palpatine, I mean Greenspan.

Kudlow likes him... so he is certainly not a Keynesian, but he is not "hard core." Lots of info here.

Yep, already saw the Wikipedia. What I'm concerned about is core theory. John Maynard Keynes wasn't exactly right, but he has some good points (one of which led to a famous quote by Harry Hopkins, "People don't eat in the long term. They eat every day.") Milton Friedman also has some good points (one of which led to the comment, "A poor man never offered me a job.") But the head of the Fed needs to be more balanced. A Keynesian will tend to ignore inflation too much. A Friedman suppy-sider tends to forget about Hopkins comment (mostly because people at that level are not and never have been poor).

The Fed's position is important beyond just the responsibilities of running the Reserve, because it has influence over fiscal policy in unexpected ways. As Greenspan proved, the wrong word from the head of the Fed about something the government is doing, and the government can either change or watch the markets lose a couple hundred points, somcething guaranteed to put pressure on the government.

We need someone involved, but not too involved. Someone who lets the government experiment, but knows when to put the brakes on. Bernanke might be the right guy. He's got the right credentials anyway, and I don't expect to see any real issues with the pick. What we'll need to see now is how he does. If you've been reading former Fed Chairman Paul Volker lately, the incoming head is going to have some very rough water to guide through. Bernanke either has it or he doesn't, and we'll find out which soon enough.

RE: Bush Nominates Bernanke to Succeed Greenspan as Fed Chief