If being good at spelling is a key quality required for governing the US Federal Bank, then you know the next chairman will be a good one. For Dr Ben Bernanke, the man who is set to replace Alan Greenspan as the worl’’s top banker in January was the champion speller of South Carolina in 1965.
But while Dr Ben may be able to spell, his is a good clear speaker too, said Georgie W yesterday, on the announcement of his appointment - still to be ratified by Senate. The US president said “As Fed governor, Ben advocated greater transparency in communication with the public and markets. His speeches were widely admired for their keen insight and clear, simple language.”
Was that a swipe at Alan Greenspan? Mr Bush has nothing but praise for the man who has held the position of Fed chairman since 1987 (stepping into the hot seat just two months before the market crash of that year) but the man who warned of irrational exuberance before the dot com tumble is hardly known for his blunt speaking. We have said as much here on many occasions, with some of the Fed announcements being shrouded in subtlety.
What is perhaps most surprising about the nomination of Dr Ben Bernanke is how widely it was predicted. He was the clear front runner, a contrast to previous appointees, Alan Greenspan and before that Paul Volker in 1979.
Dr Benranke has solid academic credentials. Born on December 13 1953, in Augusta, Georgia, when Bernanke graduated 23 years later at Harvard, he won the award for best undergraduate economics thesis. Since then he has gone on to bigger and greater things in the world of academia, and held the position of Professor of Economics and Public Affairs at Princetown for 20 years. According to George W’s speech yesterday, he is one of the most cited economists in the world.
He became a governor of the Fed earlier this year, and is known as something of a Bush favourite, but is not without critics. Some fear that he lacks experience outside the ‘twee’ world of education. Mr Greenspan, for example, was head of an economic consulting firm in New York for twenty years plus before his appointments, and held many directorships of large companies to boot.
In terms of policy shifts, it’s known that the new man for the job is a strong advocate of keeping tight reins on inflation. His blunt speaking might mean the Fed drops the word ‘measured’ when describing its approach to monetary policy, but it’s likely to continue to increase the rate of interest under his helm. But there is daylight between the new man and the present incumbent. Dr Bernanke is known to be a fan of the government setting its central bank inflation targets, Mr Greenspan liked to keep the markets guessing, leaving a slight aura of mystery surrounding the inflation target.
But lack of real world experience aside, there is another chink in Dr Ben’s armour. After becoming South Carolina spelling champ, he was knocked out of the nationals. Why? Because he was unable to spell that word which is so crucial to running a central bank - he mis-spelled the word ‘edelweiss’.
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