October 5, 2005


Bush Keeps Open Mind on Choice to Run Fed (EDMUND L. ANDREWS, 10/05/05, NY Times)

For all their merits, all three of the most serious candidates come with some negative baggage. Mr. Feldstein commands enormous prestige as an academic economist and has deep Republican ties. But his role as a director at the American International Group, the troubled insurance conglomerate, has sent shivers through the White House.

On top of that, some Republicans have never forgiven Mr. Feldstein for his criticism of deficits when he was chairman of the Council of Economic Advisers under President Ronald Reagan.

Mr. Hubbard is passionately devoted to most of Mr. Bush's economic goals and was a crucial architect of his tax cuts in 2001 and 2003. But Mr. Hubbard's strengths are not in monetary policy, and some say his relations with Mr. Bush are not extremely close.

Mr. Bernanke is a highly respected monetary economist and a former governor at the Federal Reserve. Many Wall Street analysts say he would be well received by investors. But Mr. Bernanke is still something of an unknown quantity to Mr. Bush. [...]

Under Mr. Greenspan, Fed policy makers are sharply divided about whether the Fed should set a public target for inflation. Mr. Greenspan, a Republican, has been firmly opposed. Governor Donald Kohn, a Democrat and a career Fed official, is also opposed. But Mr. Bernanke, a Republican, is an outspoken proponent of the idea.

Mr. Greenspan is expected to have some influence on the final decision, if only in the form of a surreptitious veto power. If Mr. Greenspan did have his way, some analysts suggest that his own favorite would be the relatively unknown Mr. Kohn.

Appointing a Democrat to a pretty much pro forma job would get the President good juju for free.

Posted by Orrin Judd at October 5, 2005 12:00 AM

Who is the President's accountant. That is a person to fill the Fed slot.

Posted by: Bob at October 5, 2005 4:58 PM

Ben Friedman, Bennet McCallum, or Michael Woodford.

Posted by: Tom at October 5, 2005 6:04 PM