Thursday, July 09, 2009

Second term for Bernanke?

Fed Chair Ben Bernanke's term is up in January and the WH must reappoint him or replace him.

The WJS,
Before making a decision later this year, the White House also is expected to look at other economists, including Roger Ferguson and Alan Blinder, former Fed vice chairmen; Janet Yellen, president of the San Francisco Federal Reserve Bank; and Christina Romer, chairman of Mr. Obama's Council of Economic Advisers.

Mr. Bernanke's reputation on Wall Street has ebbed and flowed. But a Wall Street Journal survey conducted this week of 46 private-sector economists found that 43 endorsed his reappointment. "Bernanke's leadership during this financial crisis was outstanding, but not flawless," said Scott Anderson of Wells Fargo & Co., one of those surveyed. "But given human limitations and the limitations of economic and financial knowledge he deserves another tour of duty." Some saw benefits to continuity. "Don't change horses in midstream," said David Wyss of Standard & Poor's. Others cited the alternatives: "Stated differently: Don't appoint Summers," said Nicholas Perna of Perna Associates.
I think one of the biggest mistakes Bill Clinton made was to appoint Alan Greenspan to a second term. An absurd cult of the personality developed around him that made it impossible for anyone to disagree with him. And it's undeniable that his monetary policy of keeping interest rates unusually low during Bush's first term was a major contributing factor the our economic collapse.

I'm not qualified to make a solid evaluation of Bernanke's performance but has a matter of basic public policy, no Fed Chair should serve more than one term. We don't need any more Greenspans.

And it's my guess that like Clinton before him, the POTUS will find it very hard not to reappoint Bernanke.

No comments: