Bernanke May Join Job Seekers Before Long
Odds are that this is Ben Bernanke's last year as chairman of the Federal Reserve. It isn't a reflection on his judgments and actions. Many economists praise his performance in making unusual moves aimed at lessening the impact of the recession. Rather, it's a fact that new presidents tend to want their own person heading up the Fed, and President Obama will get that chance when Bernanke's term expires a year from now.
The likely successor, for now, is Lawrence Summers, Obama's chief economic policy adviser who is chairman of the National Economic Council, a post created by the Clinton administration. Robert Rubin held that job before becoming Treasury Secretary, where he named Summers as his deputy. Summers later succeeded Rubin.
But Summers is no shoo-in. At Treasury he backed the expansion of global derivative trading, which critics say made the housing bubble worse and helped spread toxic debt around the globe. Summers also has opponents who fault him for remarks made while he was president of Harvard, suggesting that women don't have the aptitude for math and science that men do.
Moreover, Bernanke's exit isn't a given. If a new crisis erupts, he'd likely be reappointed. That happened in 1982 when a foreign debt crisis and a fragile economy brought pressure from financial markets that led President Reagan to rename Paul Volcker to a second four-year term. And in 1996, when President Clinton decided to keep Alan Greenspan at the Fed during a period of concern over inflation and sustaining economic expansion. Ironically, enough, the smoother things go, the more likely it will work against Bernanke.