Thursday, July 9, 2009

Big Ben's future

Brad DeLong links to a WSJ piece that I've been meaning to comment on since it showed up on my RSS feeder last night. I was a little disappointed by the article (potentially because it's behind the WSJ subscription block and I spent 10 minutes looking around the web for a copy n' pasted version until I realized that my student subscription that "expired" and the end of the semester apparently still allows me access to the online Journal). The gist of the article is:

1) The Obama administration does not know if they'll reappoint Bernanke and will likely wait to make a decision until we know more about the direction of the economy and the BAC/Merrill issues are forgotten/cleared up; 2) In addition to King Larry, "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."; and 3) there's a lot of bipartisan support for him and a fair amount of crazy people that think we should return to the gold standard or adopt socialism don't like him (OK it didn't mention that last part, just my reading on it).

Brad says:

The complaints about Bernanke seem... incoherent. And the consensus judgment appears to be the correct "outstanding but not flawless."

And, yes, Larry (or Janet, or Roger, or Allen, or Christy) would in all likelihood be very, very good at the job as well.

I agree on the first part, but not sure about the second. Brad knows the potential replacements far better than I do, but I'm not sure if we can say they would be "very, very good." Summers has a well chronicled past of being a prickly person who has to have his hand in everything. Maybe that is permissible as the top econ advisor to Obama, but Fed Chair, not so sure about that. I don't know anything about Ferguson or Blinder, and what I do know about Yellen is good but not enough to give an informed opinion. Romer certainly has the intellect and knowledge base to be qualified. Additionally, she seems to carry herself well and I think would act in a pragmatic and nonpartisan fashion at the Fed. I would say she would likely be a "very, very good" Fed Chairwoman.

I understand that political considerations will play a large role in the Presidents decision, but I hope he casts them aside and reappoints Bernanke.

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