Tuesday, June 09, 2009

Were They Watering The Green Shoots, Ben?

We don't know the individual circumstances behind this. But to the extent it and the current situation of millions of others represent the maddening consequences of monetary policy, I keep wondering what has to happen for someone to be considered unfit to run that policy or, having retired from the job, to opine about it.


The widespread assumption, from Washington to Wall Street, was that the job would be Mr. Summers’s way station until the president could name him chairman of the Federal Reserve when Ben S. Bernanke’s term expires early next year.

But Mr. Bernanke’s aggressive response to the crisis has so improved his reputation that people close to Mr. Obama increasingly suggest the president could well reappoint him in the interests of financial stability — just as Presidents Ronald Reagan and Bill Clinton retained Fed chiefs who had been picked by predecessors of the other party.

I've been worried about this -- that right around the time Obama would have to decide whether to keep Bernanke on, we'd get a window of stability and apparent improvement. Summers would be less than ideal to say the least, but I'd take him over Bernanke. The upside to a Bernanke reappointment would be the possibility that he'd still be on the job when the consequences of his recent actions become obvious. I felt the same way in 2004 about Bush's re-election.


Anonymous Anonymous said...

how high does oil go this time?

6/09/2009 9:26 PM  
Anonymous Inthon said...

At this point I'm not sure it makes a difference which "leader" is in charge since they are all QE/Keynesians/interventionists.

6/09/2009 10:50 PM  

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