Thank Bush for Bernanke

The world may not know it, but we all dodged a bullet when George W. Bush nominated Ben Bernanke to succeed the all-powerful US Fed Chairman Alan Greenspan. There were some positively scary names for potential Fed chairman floating out of the White House, and I, for one, had no confidence in the outcome.

Instead, almost miraculously, we got an absolutely first-rate economist, a safe pair of hands to guide the global economy. Those of us who know Bernanke view him as someone who has the experience, intellect, and personality to sparkle in the position that he will assume next February.

Why is the job so important? Alan Greenspan is a great man, but it is a curious set of circumstances that has elevated the job of Fed chairman to Mount Olympus.

Consider, first, that the other two major central banks in the world (the European Central Bank and the Bank of Japan) simply are not fully functional. While the Fed agilely changes policy interest rates to stabilize inflation and output, neither the BOJ nor the ECB has changed its key policy rates for years now, with the ECB stuck at 2% and the BOJ at 0%.