Behold! Bernanke Era Begins
Dave Price
And I, for one, welcome our new fiscal overlord.
Bush today announced the appointment of Ben Bernanke as successor to what is arguably the most powerful position in the world, that of Federal Reserve Chaiman. Bernanke will take the reins from Alan Greenspan in about three months when Greenspan steps down from what has been often called the most successful tenure in the Fed’s history.
I don't follow finance as closely as I used to, but I've heard of Bernanke; he has an academic background and is widely considered brilliant. He's very similar to Greenspan in terms of policy: an inflation hawk (he favors explicit inflation targets, a nuanced departure from Greenspan’s more flexible approach of general guidelines), favors federal deficits over tax hikes in most situations, and believes trade deficits are not in and of themselves a problem for the economy (this is interesting to me, as it’s a somewhat contrarian position I agree with and have argued at length on a few occasions). Bernanke was also one of the first to note, research, and talk about the global "oversavings" phenomenon that has driven down U.S. interest rates.
The markets appeared to greet the news with cautious enthusiasm, or perhaps just a sigh of relief.
Nice roundup here. The consensus seems to be he’s a John Roberts, not a Harriet Miers.
Related Posts (on one page):
- Ben Bernanke, Meet Mahmoud Ahmadinejad
- Behold! Bernanke Era Begins
I understand the fed's role, basically, which amounts to the fact that they produce money out of thin air by lending it to banks at certain rates. The intracacies beyond that, and particularly the fed chief's powers and limitations, however, I haven't ever sat down to analyze.
I'll be much happier with Greenspan saying something nice and positivie about him, probably after confirmation.
http://wordnet.princeton.edu/perl/webwn?s=fiscal
S: (adj) fiscal, financial (involving financial matters) "fiscal responsibility"
Dean: It's the Age of Wikipedia! Actually a pretty good entry.
Roles and responsibilities
The main tasks of the Federal Reserve are:
Supervise and regulate banks
Implement monetary policy by buying and selling U.S. Treasury securities
Maintain a strong payments system
Control the amount of money that is made and destroyed on a day to day basis (in conjunction with the Mint and Bureau of Engraving and Printing)
Other tasks include:
Economic research
Economic education
Community outreach
But was he ever fully an Objectivist? Rand had had her doubts from the beginning. He grasped the economics of capitalism, but did he grasp the moral basis for it? Objectivism (though it erroneously leaves out theism) is an integrated philosophy, tying in the economic and the political with the ethical, the epistemological and the metaphysical, and the aesthetic. Was Greenspan fully integrated?
His emphasis on economics left him dangerously open to the utilitarian thinking characteristic of many economic libertarians. This eventually led him to pragmatism, and he began to accept the mixed economy instead of uncompromisingly upholding capitalism. E.g., he abandoned his defense of the gold standard.