WASHINGTON – President Bush named a White House economic adviser, Ben Bernanke as chairman of the Federal Reserve Board on Monday, to replace retiring chairman Alan Greenspan, who has held the reins on the American economy as the official keeper of interest rates since 1987.
Bernanke instantly announced his first priority would be “to maintain continuity with the policy and policy strategies under the Greenspan era.”
The appointment is subject to Senate confirmation. Greenspan?s term expires Jan. 31.
Wall Street seemed to like the selection. Stocks rose as word of Bernanke’s appointment circulated before the presidential announcement.
It was the third time in as many years Bush has turned to the 51-year-old Bernanke for a sensitive economic post. The president named him to the Fed board in 2002, then made him chairman of the president’s Council of Economic Advisers earlier this year.
“If I am confirmed by the Senate I will do everything in my power, in collaboration with by Fed colleagues to help assure the continued prosperity and stability of the American economy,” said Bernanke, who holds degrees from Harvard and the Massachusetts Institute of Technology and was chairman of Princeton’s Department of Economics.
While Bernanke pledged continuity with his predecessor’s policies, the two men differ on whether the Fed should set targets for inflation – Bernanke thinks it should, Greenspan does not. Otherwise they share a similar philosophy, so much so that while the younger man was at the Fed, market observers often looked at his speeches for insight into Greenspan’s thinking.
Senate Democratic Leader Harry Reid issued a statement signaling the type of questions Bernanke might expect at his confirmation hearings.
“I look forward to the confirmation hearings to learn more about Mr. Bernanke’s views on how the Federal Reserve should steer our economy free from political influence and interference,” he said.
Reid, who has been sharply critical of Greenspan for supporting Bush’s tax cuts, added, “It will be important that Mr. Bernanke demonstrate that he is committed to guiding the economy to produce results for all Americans rather than promoting partisan policies that benefit special interests and an elite few.”
Greenspan was 61 when President Ronald Reagan named him Fed chairman.
