Bush Replaces Greenspan

The new Fed Chief will be Ben Bernanke, sources say. No word yet on his reading habits.

Comments

[IO ERROR]

I wrote about this earlier today. He's an advocate of inflation targeting and yet another Bush crony.

[John]

This guy is actually a very bright guy and I agree with him that the Feds primary purpose is to control infaltion. My satisfaction with the pick still can't shake my disgruntlment over the Miers nomination. Part of me can't help buy think, "oh come on George surely there was a former head of the Texas Railroad Commission who could have taken the job."

[Rick Barton]

FWIW

"... regarding the Great Depression: You're right, we did it." -- said Federal Reserve Board Governor Ben Bernanke, finally admitting government culpability to Nobel Laureate Dr. Milton Friedman, at Milton's 90th birthday celebration. [Financial Review, 12-9-2002]

Quote from:
http://freedomkeys.com/bkecon.htm

See also his speech:

"Money, Gold, and the Great Depression"

http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm

[Rick Barton]

From that Bernanke speech:

By allowing persistent declines in the money supply and in the price level, the Federal Reserve of the late 1920s and 1930s greatly destabilized the U.S. economy and, through the workings of the gold standard, the economies of many other nations as well.

Note Greenspan's support of the gold standard! In the essay:

"Gold and Economic Freedom"

http://www.321gold.com/fed/greenspan/1966.html

[John]

What's your point Rick? Friedman pretty much established that bad fed policy caused the great depression. The fact that this guy is smart enough to know this and admit it, seems like a good sign.

[JDM]

"I wrote about this earlier today. He's an advocate of inflation targeting and yet another Bush crony."

Look, if you're going to call Bernanke a crony you're setting making the bar pretty much unreachable for political appointments.

[Rick Barton]

John,

I agree. I'm just putting the data out there.

It would be interesting to contrast his views on the great depression with Rothbard's

[Jeff P.]

Wake me when Andrea Mitchell replaces Greenspan...

[Rick Barton]

In that fisrt quote, I don't know that the word "finally" is at all appropriate.

[Sandy]

Tyler Cowen seems to like him.

[Pro Libertate]

Here's his c.v. His e-mail address is [e-mail], if you have any questions 🙂

[Rick Barton]

It would be nice to hear Bernanke lecture congress that they need to cut spending, as Alan was given to do.

[Tom Crick]

The new Fed Chief will be Ben Bernanke, sources say. No word yet on his reading habits.

And I thought for sure he would nominate his wife!

...She's always done a good job with the checkbook, he can trust her and, besides, she's a woman!

[Brad R.]

Bernanke is a legitimate good choice. "Cronyism" implies that he's unqualified, which is certainly not true.

[Pro Libertate]

I'd say the nomination is official now.

Bad news folks, the man was on a school board for two terms. Statist! Splitter!

[Rick Barton]

CNBC just reported that he favors spending cuts over tax hikes.

[mediageek]

First impression is that he seems like a good pick. Perhaps Dubya opened his eyes for long enough to realize that if he appointed someone who sucks that it would cement his place in history as the worst president of the modern era.

[Dave Thomas]

Taking Bernanke's Measure

I think the basic consensus is that he's more of an academic than a real world economist, which raises questions about his ability to deal with global financial/economic disasters.

BTW, Greenspan renounced his support for the gold standard in later speeches.

[Rick Barton]

Dave Thomas,

To be Fed head, he'd pretty much have to renounce his support for the gold standard. But it was quite evident, especially in his exchanges with Ron Paul during those presentations to congress, that he understood the pitfalls of fiat money.

[TallDave]

I'm waiting on tenterhooks for gaius to explain why this is more evidence our entire global financial system is on the verge of collapse.

[Dave Thomas]

Well to be fair, to be Fed head he'd pretty much have to understand "the pitfalls of fiat money."

[Rick Barton]

Right. And also, if he understands the pitfalls of fiat money, his capacity for doing harm might be reduced.

[Douglas Fletcher]

I want someone who can explain the symbolism in "The Wizard of Oz," dammit.

[surf]

Ben Bernanke's most famous comment (stolen from Mises blog): "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."

My friends, this is not something an advocate of free and efficient markets would ever say or advocate. This is Lord Keynes with an "intellectual" beard.

[MikeP]

My friends, this is not something an advocate of free and efficient markets would ever say or advocate.

?

I have not dug through all the pointers others have posted here, but this is exactly what someone who thought governments should not print money would say. It is, after all, the truth.

If you can find a quote where he says, "a determined government should generate higher spending and hence positive inflation," then you have evidence of Keynesianism.

[Anonymous Coward]

If you can find a quote where he says, "a determined government should generate higher spending and hence positive inflation," then you have evidence of Keynesianism.

Well, the speech that surf cribbed the quote from is entitled "Deflation: Making Sure "It" Doesn't Happen Here". That should tell you something D:

[MikeP]

Well, the speech that surf cribbed the quote from is entitled "Deflation: Making Sure "It" Doesn't Happen Here".

I skimmed that speech. It tells me that he may be a Monetarist. I saw no evidence in there that he is a Keynesian.

[Pig Mannix]

BTW, Greenspan renounced his support for the gold standard in later speeches.

I'm curious as to where you heard that. I'd read a few years ago that he'd grudgingly accepted that the Fed had learned to manage fiat money properly, but he was still adamant about preferring the gold standard.

[surf]

As the Washington Post described Bernanke's attitude - it is better to have boomed and busted than to have never boomed at all.

This man, in his own words, is an advocate of deficient markets.

[surf]

As the Washington Post described Bernanke's attitude - it is better to have boomed and busted than to have not boomed at all.

This man, by definition, is an advocate of deficient markets