Ben Bernanke Named as Greenspan Replacement as Fed Chair
President Bush is expected to announce his choice to succeed Federal Reserve Board Chairman Alan Greenspan at 1 p.m. Eastern today.
President Bush said Monday he was nearing an announcement on a successor to Federal Reserve Board Chairman Alan Greenspan. Administration officials said an announcement was expected at 1 p.m. EDT. Greenspan, who took over in August, 1987, wraps up his term as chairman Jan. 31. Asked about the appointment, Bush said, “We’ll be making an announcement soon.”
A top contender was believed to be Ben Bernanke, 51, chairman of the president’s Council of Economic Advisers. There had been widespread speculation that Bush might act as early as this month to ease the transition. However, announcing Greenspan’s successor also provided a diversion for a White House reeling under congressional criticism of the Harriet Miers’ Supreme Court nomination and a federal investigation into whether top officials leaked the name of a CIA operative for political purposes. Some economists and market watchers have suggested that Bush pick someone with solid credibility and experience in an effort to calm jitters in markets long used to Greenspan’s leadership.
For some time, most speculation has centered on three potential candidates Ã¢€” Bernanke, who took over as chairman of the president’s Council of Economic Advisers this year after having served as a Fed board member; Columbia University professor Glenn Hubbard, Bush’s first CEA chairman; and Harvard economics professor Martin Feldstein, who was CEA chairman during the Reagan administration.
I don’t know enough about any of these men to have a strong preference between them, although all seem well qualified. If recent history is a guide, Bush will choose someone he personally knows and trusts, seemingly ruling out Feldstein.
Personally, I’d prefer former Senator Phil Gramm, but that’s not likely.
Let’s just say there’s not a Harriet Miers in the bunch.
Update (1208): MSNBC says it’s Bernake: Bush expected to name Bernanke next Fed chief
President Bush is poised to name Ben Bernanke, chairman of his Council of Economic Advisers, to succeed Federal Reserve Chairman Alan Greenspan, NBC News and Reuters reported Monday. An announcement is expected at 1 p.m. ET, according to an administration official.
Update (1219): CNN reports the same: Bernanke’s the man — President Bush’s nominee to succeed Greenspan is expected to be chief economic adviser.
President Bush was expected to announce Monday that he has picked top economic adviser Ben Bernanke to succeed Alan Greenspan as Federal Reserve Chairman, a person close to the administration said Monday.
The White House wanted to find a nominee quickly to allow enough time for the Senate to vote on confirmation before it adjourns for the year.
Bernanke is chairman of Bush’s Council of Economic Advisers. He served on the Fed’s board of governors for nearly three years before moving to the White House in June. His move to the White House was watched with interest on Wall Street because of the belief that he was on the fast track to replace Greenspan. Bernanke was considered one of the policy trend setters while at the central bank, espousing the virtues of an inflation target to guide monetary policy.
They have an interesting sidebar story: Bernanke: A path to the Fed
Ben Bernanke currently serves as the chairman of President Bush’s Council of Economic Advisers, which provides the president with analysis and advice on economic issues. Before his appointment to the council in 2005, Bernanke served as a governor of the Federal Reserve, the nation’s central bank.
As chairman of Princeton’s economics department before joining the Fed in 2002, Bernanke has said he always thought he would be an academic lifer. With interests in monetary policy and macroeconomic history, Bernanke has published extensively on the Great Depression and a wide variety of economic issues. He also has been known as a strong advocate of transparency at the central bank.
Born on December 13, 1953, in Augusta, Georgia, Bernanke was raised in South Carolina. He began collecting academic honors early, winning the South Carolina state spelling bee in 1965. He was eliminated at the nationals, however, when he misspelled “edelweiss.”
He earned his B.A. in economics at Harvard University in 1975, where he won the award for best undergraduate economics thesis as well the prize for outstanding senior in the economics department. After receiving his Ph.D. in economics from MIT in 1979, he started his teaching career at Stanford University’s Graduate School of Business. He left Stanford for Princeton in 1985, where he spent 20 years on the faculty as a Professor of Economics and Public Affairs. He also has served as a visiting faculty member at other institutions, including MIT.
During his time at Princeton, Bernanke got an education in public service while serving two terms as a member of his local school board in Montgomery Township in New Jersey. The academic turned policy-maker has said that experience formed many of the skills he used while at the Fed.
He’s held a Guggenheim Fellowship and a Sloan Fellowship, and also has served as editor of the American Economic Review.
He’s published many articles on a wide variety of economic issues, including monetary policy and macroeconomics, and he is the author of several scholarly books and two textbooks.
The man may know Bush well but we can safely assume no one will say the man is a “crony.” Impressive, indeed.
Update (1510): It’s official.
President Bush named top White House economic adviser Ben Bernanke as chairman of the Federal Reserve Board on Monday in place of near-legendary Alan Greenspan as the official in closest control of interest rates. Bernanke instantly announced his first priority would be “to maintain continuity with the policies and policy strategies under the Greenspan era.” Bush said his choice as the nation’s new central banker “commands deep respect in the financial community.” And he lavished praise on Greenspan, 79, calling him a legend who “has shepherded our economy through its highs and its lows.”
The appointment is subject to Senate confirmation, and the president called for swift action. Sen. Richard Shelby, R-Ala., chairman of the Senate Banking Committee, issued a statement saying “I am confident that this nominee will be thoroughly questioned but also well-received by all members of our committee.”
Whatever the Senate’s ultimate reaction, Wall Street liked what it heard. Stocks rose as word of Bernanke’s appointment circulated before the presidential announcement.
Absent scandalous revelations between now and then–incredibly unlikely given how often he has been vetted by now–I expect the confirmation to be virtually unanimous. Finally, a slam-dunk pick.
Post title updated.
Update (1522): Steve Bainbridge concurs in my assessment that Bernanke is the anti-Miers:
. . . Bernanke is everything Miers isn’t. Top academic credentials (Harvard and MIT). A widely published author who has given numerous speeches on substantive issues. Top academic posts in his field. Directly relevant work experience at the highest level as a former Fed member. Twice confirmed by the Senate in recent years (as a Fed board member and then as Chairman of the Council of Economic Advisors. Tyler Cowen identifies 5 major contributions Bernanke has made as an economist (Could anybody come up with anything remotely comparable for Miers) . . .
Bird chirps follow.
My co-blogger Steve Verdon weighs in as well.