By Staff
Contrary to the Supreme Court nomination of unqualified Harriet Miers, now withdrawn, President George W. Bush made an excellent choice in economist Ben Bernanke, 51, to replace inflation-fighting Federal Reserve Chairman Alan Greenspan, retiring after 18 years.
The bearded Bernanke, an Ivy League-trained academic who was born in Georgia, has chaired the president's Council of Economic Advisers since June and is a former member of the Federal Reserve's Board of Governors.
Bush noted Bernanke's speeches are “widely admired for their keen insight and clear, simple language.”
At his confirmation hearing in July 2002 for his previous Fed job, Bernanke advised the Senate Banking Committee, “Saturation coverage by cable TV networks notwithstanding, the stock market is not the whole economy.”
He believes in keeping inflation at around 2 percent.
While he was an economics professor and department chairman at Princeton University, Bernanke even served two terms on his local school board in Montgomery Township, N.J.
The Federal Reserve is the nation's central bank.
It's made up of a seven-member board in Washington, plus a dozen regional banks.
The Fed's primary responsibility is controlling the availability of money and its cost - interest rates.
When the economy grows sluggishly, the Fed feeds more money into the banking system.
That pushes interest rates down to prod borrowing and economic growth.
When the economy expands too rapidly and inflation rises, the Fed pulls money back from the banking system, slowing growth through higher interest rates.
Bernanke's pluses to the president are that he was not only a highly respected economist, but he specialized in the operations of central banks and he served on the Fed board before his selection as chairman of the Council of Economic Advisers this year.