DRAGON SLAYER:

Bernanke quietly guides economy: On Thursday, Ben Bernanke will have been Fed chairman for a year. He has steered the central bank through an economic turning point. (Sue Kirchhoff, 1/30/07, USA TODAY)

As he finishes his first year as chairman, the unassuming Bernanke, 53, doesn't have Greenspan's head-turning sway over the general public, at least not yet, but he does have firm control of the central bank and the growing confidence of financial markets.

The former Princeton professor, Fed governor and White House adviser has steered the central bank through a turning point in an economy that was confronting a tumbling housing market and uncomfortably high inflation. The Fed, which meets here today and Wednesday to review interest rate policy, has held the target for short-term interest rates steady since June after two years of raising it to combat inflation. Economic growth slowed in the second half of 2006, but the job market strengthened.

"I congratulate you and the Fed in keeping interest rates where the American people can stand and the economy can prosper," Jim Bunning, R-Ky., the sole senator to oppose Bernanke's nomination, told him this month.

Working with other regulators, the Bernanke Fed has also tightened guidelines for commercial real estate and mortgage lending and toughened standards for complex financial products misused by energy giant Enron.

Fear of prospective inflation can contribute to inflation, but at some point you have to stop fighting an imaginary beast.

MORE:
Bullish on Bernanke: Turnaround Earns Him Praise from Wall Street to Capitol Hill (Nell Henderson, January 30, 2007, Washington Post)

The new chairman of the Federal Reserve got off to a rocky start last spring. Inflation was surging, the housing market was slumping, and Ben S. Bernanke's initial responses caused turmoil on Wall Street.

But a year into Bernanke's tenure, the picture has turned considerably brighter. Inflation is falling; unemployment is low; wages are rising; and the economy, despite continued problems in housing, is growing at a brisk clip. Bernanke is earning plaudits from Wall Street to Capitol Hill.

90% of success is just showing up.

Posted by Orrin Judd at January 30, 2007 8:10 AM