Eutrusca
25-10-2005, 13:27
COMMENTARY: Even moreso than Supreme Court Justice appointments, the individual appointed as Federal Reserve Board Chairman has long-lasting and wide-ranging impact on Americans and their future. You probably won't find this article, or the man about whom it's written very interesting ... but you should!
White House Gamble Pays
for a Princeton Professor (http://www.nytimes.com/2005/10/25/business/25profile.html?th&emc=th)
By LOUIS UCHITELLE and EDUARDO PORTER
Published: October 25, 2005
Even before President Bush named Ben S. Bernanke as chairman of the Council of Economic Advisers this spring, Mr. Bernanke decided to gamble. He sold his home in New Jersey last year and told friends that, instead of returning to a tenured professorship at Princeton University, he was taking a chance that President Bush would elevate him from obscurity as a Federal Reserve governor to a top political appointment.
The gamble paid off. If the Senate confirms him, Mr. Bernanke will arguably become the most powerful economic leader in the world. Not since Arthur Burns, the Federal Reserve chairman from 1970 to 1978, has a university professor run the nation's central bank.
But while Washington policy making may be Mr. Bernanke's newly chosen field, no one seems to have a clear idea what his political views are, other than the fact that he is a registered Republican. Mr. Greenspan took strong political positions, using his pulpit at the Fed to promote Social Security private accounts and to sell the president's tax cuts. Mr. Bernanke, in contrast, has been muted on such political hot potatoes even as the president's chief economic adviser.
Now, as he moves to the Fed, he is likely to steer the central bank away from the broader political debate. "One can expect Bernanke to adhere strictly to a more silent stance regarding issues outside of monetary policy," said Kevin A. Hassett, director of Economic Policy Studies at the American Enterprise Institute.
Mr. Bernanke, 51, is more like a "Mr. Smith Goes to Washington" than the political figure that Mr. Greenspan already was when he became Fed chairman in 1987. Appointed a Fed governor in August 2002, Mr. Bernanke from the start considered his term in Washington as a time-out from academia.
But Washington grew on him. His friend, Gene M. Grossman, another Princeton economist, said that Mr. Bernanke "thought it would be informative and interesting to actually work on policy."
"And then he found he was enjoying it and he was good at it," he said.
Hooked as he was, Mr. Bernanke nevertheless bridled at Washington's customs, including its dress code. "The biggest downside of my current job is that I have to wear a suit to work," he told fellow economists in a speech last January. He likes tan socks and was once chided by President Bush for wearing them with a dark suit. His puckish response was to buy a dozen tan socks and distribute them at the next White House gathering.
Less than three years into the Fed job, Mr. Bernanke's name went to the top of the list of candidates for the chairmanship of the Council of Economic Advisers. By then he had sold his home for $630,000 in Montgomery Township, N.J., where he had served for a while as president of the board of education, and purchased a house in Washington, paying $839,000 for it.
As a professor he wrote dozens of papers on economics and was the co-author with Robert H. Frank of Cornell University of an economics textbook for beginners. At the Fed, his heavily footnoted speeches had a scholarly twist. He is credited with coining the term "savings glut" to help explain the huge American trade deficit that is largely financed by the savings of foreigners.
A diffident, unassuming man, he nevertheless is often playful. He regularly wrote songs and skits for Christmas gatherings of faculty and students, and sometimes performed in them. While Mr. Bernanke was working on a textbook with Mr. Frank in the late 1990's, a competitor, N. Gregory Mankiw, a Harvard professor and Mr. Bernanke's predecessor at the council, published his own textbook.
Mr. Mankiw, in his book, made a point about the value of time, and posed the hypothetical question: Should the basketball superstar Michael Jordan mow his own lawn? The Mankiw textbook was a best seller and made him a considerable amount of money. According to Mr. Frank, Mr. Bernanke insisted that their book ask the question: Should N. Gregory Mankiw mow his own lawn?
Mr. Frank, a liberal professor at Cornell, and Mr. Bernanke were an odd couple as authors of "Principles of Economics," published in 2001. While Mr. Frank wears his politics on his sleeve, Mr. Bernanke does not.
[ This article is two pages long. To read the rest of the article, go here (http://www.nytimes.com/2005/10/25/business/25profile.html?pagewanted=2&th&emc=th). ]
White House Gamble Pays
for a Princeton Professor (http://www.nytimes.com/2005/10/25/business/25profile.html?th&emc=th)
By LOUIS UCHITELLE and EDUARDO PORTER
Published: October 25, 2005
Even before President Bush named Ben S. Bernanke as chairman of the Council of Economic Advisers this spring, Mr. Bernanke decided to gamble. He sold his home in New Jersey last year and told friends that, instead of returning to a tenured professorship at Princeton University, he was taking a chance that President Bush would elevate him from obscurity as a Federal Reserve governor to a top political appointment.
The gamble paid off. If the Senate confirms him, Mr. Bernanke will arguably become the most powerful economic leader in the world. Not since Arthur Burns, the Federal Reserve chairman from 1970 to 1978, has a university professor run the nation's central bank.
But while Washington policy making may be Mr. Bernanke's newly chosen field, no one seems to have a clear idea what his political views are, other than the fact that he is a registered Republican. Mr. Greenspan took strong political positions, using his pulpit at the Fed to promote Social Security private accounts and to sell the president's tax cuts. Mr. Bernanke, in contrast, has been muted on such political hot potatoes even as the president's chief economic adviser.
Now, as he moves to the Fed, he is likely to steer the central bank away from the broader political debate. "One can expect Bernanke to adhere strictly to a more silent stance regarding issues outside of monetary policy," said Kevin A. Hassett, director of Economic Policy Studies at the American Enterprise Institute.
Mr. Bernanke, 51, is more like a "Mr. Smith Goes to Washington" than the political figure that Mr. Greenspan already was when he became Fed chairman in 1987. Appointed a Fed governor in August 2002, Mr. Bernanke from the start considered his term in Washington as a time-out from academia.
But Washington grew on him. His friend, Gene M. Grossman, another Princeton economist, said that Mr. Bernanke "thought it would be informative and interesting to actually work on policy."
"And then he found he was enjoying it and he was good at it," he said.
Hooked as he was, Mr. Bernanke nevertheless bridled at Washington's customs, including its dress code. "The biggest downside of my current job is that I have to wear a suit to work," he told fellow economists in a speech last January. He likes tan socks and was once chided by President Bush for wearing them with a dark suit. His puckish response was to buy a dozen tan socks and distribute them at the next White House gathering.
Less than three years into the Fed job, Mr. Bernanke's name went to the top of the list of candidates for the chairmanship of the Council of Economic Advisers. By then he had sold his home for $630,000 in Montgomery Township, N.J., where he had served for a while as president of the board of education, and purchased a house in Washington, paying $839,000 for it.
As a professor he wrote dozens of papers on economics and was the co-author with Robert H. Frank of Cornell University of an economics textbook for beginners. At the Fed, his heavily footnoted speeches had a scholarly twist. He is credited with coining the term "savings glut" to help explain the huge American trade deficit that is largely financed by the savings of foreigners.
A diffident, unassuming man, he nevertheless is often playful. He regularly wrote songs and skits for Christmas gatherings of faculty and students, and sometimes performed in them. While Mr. Bernanke was working on a textbook with Mr. Frank in the late 1990's, a competitor, N. Gregory Mankiw, a Harvard professor and Mr. Bernanke's predecessor at the council, published his own textbook.
Mr. Mankiw, in his book, made a point about the value of time, and posed the hypothetical question: Should the basketball superstar Michael Jordan mow his own lawn? The Mankiw textbook was a best seller and made him a considerable amount of money. According to Mr. Frank, Mr. Bernanke insisted that their book ask the question: Should N. Gregory Mankiw mow his own lawn?
Mr. Frank, a liberal professor at Cornell, and Mr. Bernanke were an odd couple as authors of "Principles of Economics," published in 2001. While Mr. Frank wears his politics on his sleeve, Mr. Bernanke does not.
[ This article is two pages long. To read the rest of the article, go here (http://www.nytimes.com/2005/10/25/business/25profile.html?pagewanted=2&th&emc=th). ]