We heartily endorse Ben Bernanke's reappointment as Chairman of the Federal Reserve. Detractors (and I) will fault this mild-mannered Princeton professor for having been slow to tag the subprime super-bubble and for allowing Lehman to go belly-up. However, most will laud him for having adroitly and courageously managed the unprecedented measures that appear to have staved off disaster. While there are many reasons to think the White House has made the right choice, here are my top six:
6) When appearing before often hostile legislators, Bernanke has yet to punch a single Congressman in the nose. Imagine being accused by Senator Chris Dodd, aka a Friend of Angelo, of being too cozy with bankers, or dealing seriously with Emanuel Cleaver, Democrat from Missouri, who objected to the use of the term "bad bank". Or even listening to Maxine Waters. Talk about restraint.
5) Mr. Bernanke's widely respected scholarship on the Great Depression has been reassuring; he is thought to be in an excellent position to avoid the Hoover administration's calamitous mis-steps which extended the downturn. Certainly, Bernanke is highly motivated to avoid a repeat of the 1930s; if the current slump tops that terrible contraction, at the very least his book, "Essays on the Great Depression," would have to be retitled.
4) Early on, Bernanke successfully played Obi-Wan Kenobi to Tim Geithner's Luke Skywalker. Tim Geithner's arrival on the scene as Treasury Secretary coincided with the complete collapse of the stock market, and of the economy. Looking and sounding more like a high school trigonometry teacher than the world's leading financier, "Timmy's" first tentative missteps could have provoked even wider-spread panic if he had not had the back-up of the confidence-inspiring Mr. Bernanke.
3) The appointment of Bernanke is especially welcome because it forestalls the most likely alternative choice-- Larry Summers. Though undoubtedly smart, Mr. Summers is heavily afflicted with "foot in mouth" disease. Not only does that put him in possibly nasty competition with Vice President Joe Biden, who has vigorously claimed that turf as his own, it could have also wreaked havoc with the administration's efforts to explain to the American people just where all their hard-earned taxes have gone. Mr. Bernanke is direct, and thoughtful, and has reassuringly avoided that conversation altogether.
2) As our economics technocrats and Congress attempt to reorder financial regulation so as to prevent another boom and bust, the Federal Reserve will likely emerge with a larger overseer role. The ability of any entity to step in and correct a financial bubble before it becomes sinister will require courage and political independence. Republican Bernanke, originally appointed by President Bush, is unlikely to bend to the whims of the White House-- any White House.
1) Every circus needs a ringmaster. There are, lurking around the corridors of Obamaland, enough economists and financial potentates to confuse and frustrate any decision-maker. Christina Romer, Chairman of the Council of Economic Advisors, Sheila Bair, head of the FDIC, Paul Volcker, head of the president's Economic Recovery Advisory Board, Larry Summers, Director of the National Economic Council, SEC head Mary Schapiro and TARP czar Herb Allison constitute just the visible ranks of those trying to shape the country's financial future (some would include Goldman CEO Lloyd Blankfein.) Mr. Geithner has reportedly stooped to using expletives to keep this volatile and ambitious group in line. Our guess: give Mr. Bernanke a red coat and a whistle, and he's your man.
Liz Peek is a financial columnist who writes frequently for the FOX Forum.
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