Monday, January 30, 2006

Greenspan Out, Bernanke In

This is an excellent time for the leavetaking of Al Greenspan, as the last go-round of Interest rate hikes almost certainly are not the pattern desired. He will be leaving before the political fallout of unsavory economic numbers rise to a alarmist level. He will get out with his reputation intact, though much of the bad economic policy coming from the Fed results from immoderate economic training given to several Generations of Economists and Business personnel. This is not actually a bad thing, because Greenspan consists of the stuff of Icons!

Ben Bernanke was trained in the Greenspan era, and therefore has been captivated by the Greenspan spin; a fact which Bernanke may come to resent. He lacks the political contacts of the great Greenspan, and the political expertise. Fed Chairmanship require both the Former and the Later, as the Chairman must deal as an Equal with President, Senator, and Representative. His lack of political connections will not serve to divert criticism as was the Case for his Predecessor.

Bernanke's skill as an Economist has already been established, but this could work against him. The Fed Chair requires a common-sense attitude combined with a gritty willingness to get into the trenches. Bernanke may lack the truculence mandated for the position. Pulling out Graphs in the midst of a bloodbath simply indicates lack of touch with reality, not defendable argument in the political spectrum. We will have to wait and see! lgl

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