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August 07, 2005

WSJ.com - Search for Fed Chairman Widens

Greg Ip is overly polite:

WSJ.com - Search for Fed Chairman Widens: By GREG IP: The White House search for a successor to Federal Reserve Chairman Alan Greenspan... goes beyond the three candidates mentioned most often, said people familiar with matter. For months, the three candidates cited most frequently have been economists Martin Feldstein of Harvard University, Glenn Hubbard of Columbia University and Ben Bernanke, chairman of President Bush's Council of Economic Advisers. But the White House also is looking at other candidates, including former Bush adviser Lawrence Lindsey....

Vice President Dick Cheney and National Economic Council Director Allan Hubbard are leading the search, one former administration official said.... Fed governor Donald Kohn, a former senior staffer at the central bank and a political independent, remains a favorite of Fed staff as a potential Greenspan successor. But Mr. Bush is unlikely to nominate anyone who isn't a Republican.

One reason the White House is looking beyond the three most prominent candidates is that it is "very concerned that whoever they get not only has understanding of monetary policy, but experience working with financial markets and the ability to use business and market contacts to get ahead of the statistical economic data," said one former administration official...

Larry Lindsey has powerful strengths (and some weaknesses) as a potential Fed candidate. But his strengths do not include "working with financial markets" and the "ability to use business and market contacts to get ahead of the statistical economic data."

The message that I get from Greg Ip's article is that the Fed Chair search is yet another Cheney-led Bush initiative where they haven't a clue as to what they should be doing.

Posted by DeLong at August 7, 2005 08:23 PM