ON THE ROLE OF THE FED CHAIRMAN
Bernanke's support for Greenspan's broad approach is echoed in a Bloomberg interview, which also gives some insight into his manner and demeanor. The nominee certainly believes that the role of Fed Chairman can make the critical difference to the fate of the economy: In an essay in Foreign Policy, he argues that the 1929 crash could have been averted by a smarter hand on the Fed tiller.
In a keynote speech on the topic “What Have We Learned Since 1979?”, Bernanke reveals his own priorities as he lavishly praises the legacy of both Greenspan and his predecessor, Paul Volcker, in using fiscal policy to combat inflation, which he sees as the greatest threat to economic stability and prosperity .
ON THE HOUSING BUBBLE
Speaking to execs in Chicago last March in his capacity as Fed official, Bernanke parsed the dynamics in the economy and their policy implications. The speech echoed some familiar warnings by Fed Chairman Alan Greenspan, particularly the prediction that the housing bubble is unsustainable, and while it's unlikely to burst, it will likely deflate slowly, bringing returns on property investments gradually more into line with the more modest gains yielded by other assets.
ON KATRINA'S ECONOMIC IMPACT
His most recent pronouncement on the state of the economy is contained in his address, as head of the President's Council of Economic Advisers, on the impact of Hurricane Katrina and its aftermath on America's economic recovery. Here he argues that the impact will be limited.
Not everyone is thrilled at his nomination to succeed Greenspan: The true believers in “supply-side” economics at the conservative National Review may back President Bush on most issues, but they are no more impressed with the nomination of Bernanke than they are with that of Harriet Miers. Bernanke, they warn, doesn't share some of their basic positions on issues such as taxation. By contrast, curiously enough, Paul Krugman standard bearer of the Left in national economic debates and often a fierce critic of Greenspan appears to welcome the nomination of his former Princeton colleague, although he fears that Bernanke's tenure at the White House may have compromised his independence.