August 25, 2009


I see that Obama just re-nominated Bernanke to head the Fed for another four years. This would be the same Bernanke that led the Fed through the worst recession in since the great depression. I'm certainly not convinced the guy is the right one in that job. Moreover, Obama ran on a "change" platform, and keeping the same guy doesn't seem much like change.

Has their ever been a case of a Fed Chairman who lost their job after one term? Have we gotten to the point that you cannot fire the Chair of Fed? Sure seems that way.

(I'm assuming that Obama is keeping Bernanke for stability reasons; that tossing him out will roil the economic waters (no matter how bad/good Bernanke is, or however good/bad his replacement would be, there will be economic uncertainty if he goes), and Obama doesn't want to harm the chances of a recovery by throwing uncertainty into the mix. Thus, he keeps Bernanke. That's my hypothesis.)

Posted by baltar at August 25, 2009 09:40 AM | TrackBack | Posted to Economics | Politics


Also, doesn't he still have like 400 appointed offices to fill and a health care plan to risk his presidency on? Given the circumstance, replacing Bernanke would entail as big a circus as appointing a Supreme Court justice, if not worse. Manageable, to be sure, but a politically costly choice under the circumstances. I think he just wants to put this one to bed early and keep his eye on the ball.

Posted by: moon at August 25, 2009 09:54 AM | PERMALINK

Eh. I'll grant he's got lots to do, but when does a President not have lots to do? And I haven't seen anything in the media that argues that Bernanke is the obvious/brilliant/brilliantly obvious choice for Obama to make. I agree that he seems to be doing this by default, but that doesn't make me happy.

Posted by: baltar at August 25, 2009 10:12 AM | PERMALINK

Ben's not a bad choice. Paulson was a bad choice (on W's part), and the world is better off with him slumbering in obscurity, but BB is okay. Continuity counts for a lot in that role. Do you have a markedly better candidate in mind? I can't think of any.

Posted by: jacflash at August 25, 2009 01:33 PM | PERMALINK

He's got time, but stalling the market's recent progress and distracting from the bigger fish he's trying to fry threatens the stability of the former and renders less probable the success of the latter.

Btw, my kingdom for someone who points out, in connection with this Republican nonsense about the necessity of 75-80 "yea" votes to carry healthcare, that Bush's economy-destroying tax cuts passed the senate with 51 votes.

Posted by: moon at August 25, 2009 05:12 PM | PERMALINK

The market's "recent progress" is mostly made of faerie dust and horseshit, IMO. I expect it'll take a big fat tumble between now and, oh, Novemberish.

Posted by: jacflash at August 25, 2009 09:59 PM | PERMALINK

If such a thing happens before his confirmation hearings, that should add some fireworks to the event.

Posted by: Armand at August 25, 2009 10:26 PM | PERMALINK

...All of which makes me wonder whether his re-appointment is about "best guy for the job" or more about "don't change horses mid-stream." I have more faith that a better Fed Chairman will produce better economic results (long term; short term I grant that the uncertainty may cause some economic instability).

Posted by: baltar at August 25, 2009 11:03 PM | PERMALINK

I don't have a ton of faith that "a better Fed Chairman will produce better economic results", except in a small, incremental sort of way... and for that matter, I'm not clear on what your complaint with the incumbent is.

Look, the Fed doesn't have all that much more control over the US (much less the global) economy than the NWS does over the weather. It is a giant, unruly, probably ultimately incomprehensible chaotic system with billions and billions of inputs. We just had a massive asset bubble pop -- a huge system-shaking event -- and frankly the world is still in the OMFGWTF-dithering stage. The fact that BB's first instinct wasn't to re-reinflate the bubble already makes him better than 80% of the people who would have been considered for the job a couple of years ago. But "the economy still sucks" isn't in and of itself a reason to dump him. I'd like to hear why you think he should be dumped, who you'd like to see as a successor, and why that person would be better.

Posted by: jacflash at August 26, 2009 08:28 AM | PERMALINK
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