Andrew Balls: Bernanke Not Soft, But Diplomatic And Open
Ben Bernanke did not look very comfortable in the temporary office he used in a building next to the White House during his short tenure as chairman of President George W. Bush's Council of Economic Advisers. He looked still less comfortable in public settings as a promoter of the administration's policies.
His nomination to replace Alan Greenspan as chairman of the Federal Reserve means that - pending Senate confirmation - he will be returning to a more familiar setting. The chairman's office, adjoining the Fed's boardroom, is a couple of doors down the corridor from the room that Mr Bernanke occupied as a Fed governor from 2002 until earlier this year.
Mr Bernanke has stressed that, while there will be evolutionary change at the Fed, the first priority will be establishing continuity - little surprise given Mr Greenspan's record. Over his 18 years at the Fed, growth and consumer price inflation averaged 3 per cent a year. Mr Greenspan also showed great flexibility in dealing with shocks to the US economy, from the stock market crash of 1987 to the aftermath of the September 11 2001 terrorist attacks.
There are some ways that Mr Bernanke is likely to match - and perhaps even surpass - Mr Greenspan, but others in which there will be a considerable gap. Even with Mr Bernanke's prior policymaking experience, it will take time to develop the kind of credibility that Mr Greenspan has enjoyed.
"You have to make the comparison between Bernanke and Greenspan as he was 18 years ago. Bernanke is a much more accomplished monetary economist but he has had much less political experience and involvement," says Allan Meltzer, professor at Carnegie Mellon University and a historian of the Fed.
"The obvious question is on his judgment because he has not been tested in this way. Once he has assumed the mantle and made some decisions we will be able to assess his ability to step away from the academic models and say that the balance of risks leans this way or that way."
Mr Bernanke is one of the leading academic monetary economists of his generation. At the Fed he was a highly influential governor on issues from how to deal with the threat of deflation to the causes and consequences of the current account deficit. He demonstrated his abilities as an independent thinker, pushing for greater transparency at the Fed and a clearer inflation objective, but also great diplomacy, avoiding conflict with Mr Greenspan.
His nomination to replace Alan Greenspan as chairman of the Federal Reserve means that - pending Senate confirmation - he will be returning to a more familiar setting. The chairman's office, adjoining the Fed's boardroom, is a couple of doors down the corridor from the room that Mr Bernanke occupied as a Fed governor from 2002 until earlier this year.
Mr Bernanke has stressed that, while there will be evolutionary change at the Fed, the first priority will be establishing continuity - little surprise given Mr Greenspan's record. Over his 18 years at the Fed, growth and consumer price inflation averaged 3 per cent a year. Mr Greenspan also showed great flexibility in dealing with shocks to the US economy, from the stock market crash of 1987 to the aftermath of the September 11 2001 terrorist attacks.
There are some ways that Mr Bernanke is likely to match - and perhaps even surpass - Mr Greenspan, but others in which there will be a considerable gap. Even with Mr Bernanke's prior policymaking experience, it will take time to develop the kind of credibility that Mr Greenspan has enjoyed.
"You have to make the comparison between Bernanke and Greenspan as he was 18 years ago. Bernanke is a much more accomplished monetary economist but he has had much less political experience and involvement," says Allan Meltzer, professor at Carnegie Mellon University and a historian of the Fed.
"The obvious question is on his judgment because he has not been tested in this way. Once he has assumed the mantle and made some decisions we will be able to assess his ability to step away from the academic models and say that the balance of risks leans this way or that way."
Mr Bernanke is one of the leading academic monetary economists of his generation. At the Fed he was a highly influential governor on issues from how to deal with the threat of deflation to the causes and consequences of the current account deficit. He demonstrated his abilities as an independent thinker, pushing for greater transparency at the Fed and a clearer inflation objective, but also great diplomacy, avoiding conflict with Mr Greenspan.