Friday, April 01, 2005

Ben Bernanke To Be CEA Chairman

From today's White House personnel announcement:

The President intends to nominate Ben S. Bernanke, of New Jersey, to be a Member of the Council of Economic Advisers. Upon confirmation, the President will also designate him Chairman. Dr. Bernanke currently serves on the Federal Reserve System's Board of Governors. In addition, he also serves as Professor of Economics and Public Affairs at Princeton University, a position he has held for twenty years. Dr. Bernanke previously taught at Stanford University, New York University, and Massachusetts Institute of Technology. He earned his bachelor's degree from Harvard University and his Ph.D. from Massachusetts Institute of Technology.
Bernanke is an excellent choice and I wish him the best.

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PGL said...

He will be if he can avoid what palgued Glenn Hubbard and Greg Mankiw. I said Glenn was a great choice but then Karl Rove become his ghoast writing. I said Greg would never let than happen to him, but I was wrong. Good luck Ben - and stay away from Karl's Kool Aid!

CalculatedRisk said...

Bernanke was rumored to be the leading candidate to replace Greenspan. I wonder if this appointment means he will not be the next Fed Chairman?

stan said...

A real shame. The Federal Reserve is a serious place doing serious work. Bernanke was a beacon in the changing operations of the Federal Reserve Bank. His impact on the market was just shy of that of Mr. Gspan himself.
The Council of Economic Advisors under any President is a PR site.
Every investor will miss the clear tones of Ben Bernanke.

exdartmouthstudent said...

Can I please have a sample of the drugs you are taking? Or at least some sedatives so I don't explode?

You are aware of course, that Ben "Gutenberg" Bernanke was the only central banker in the history of the world to go on record as PROMISING to print money and thus generate inflation?!?!?!? He WANTS to generate inflation?!?!?!?!!

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

It's tough to beat this analysis of Bernanke (listed as reason #1 of "what made the next depression worse", here

Well, these comments certainly do calm fears that deflation is in our future. But what he seems incredibly sanguine about is the effects of inflation. Already, inflation amounts to a daily robbery of the American consumer. Even in these supposedly low inflation times, price indexes have doubled since 1980. What this means is that one dollar in 1980 purchases only 50 cents worth of goods and services today. There are no long lines at gas stations and we aren't panicked for our future, but we are still being robbed, only more slowly and more subtly than in the past.

The Bernanke appointment is certainly a wake up call for anyone who has a benign view of the Bush administration's economic priorities. Indeed, we might as well say that, long term, this could be the most egregious decision that the Bush administration has made.

An inflationist Keynesian and an aggressive advocate of printing-press economics, Bernanke is the sort of crank who becomes famous in history for having destroyed whole countries. He is utterly and completely dedicated to the idea that paper money will save the world, with no downside. I shudder for our future if he becomes head of the Fed. Yet this appointment is probably a pathway to Greenspan’s job, as it was for Greenspan himself.

And then there was this particularly surreal bit of new-age Economics from "Helicopter Man" himself:
I will take issue with the common view that the recent deterioration in the U.S. current account primarily reflects economic policies and other economic developments within the United States itself.
I will argue that over the past decade a combination of diverse forces has created a significant increase in the global supply of saving--a global saving glut--which helps to explain both the increase in the U.S. current account deficit and the relatively low level of long-term real interest rates in the world today.

A Savings Glut? There is too much savings????