Over the past 17 years FYI has devoted a great deal of articles to the Federal Reserve and the Chairmen who were at the helm. Each one had his time in the spotlight when he had to guide the economy thru trying times. There was only one, George Miller, whose failure to take action against rising inflation forced President Jimmy Carter to replace him. His biggest achievement was reported to be his campaign against smoking in the Federal Reserve Board room.
Chairman Volcker faced one of the worst periods of inflation this country had ever experienced. Soon after he assumed the Chairmanship, inflation rose to 14 percent. Today it hovers around 2.0 percent, however that period left such an impression on the Federal Reserve that even the slightest hint of inflation causes concern.
Chairman Volcker was followed by Chairman Alan Greenspan. I actually mentioned in an earlier FYI the number of times his name appeared in FYI, which at the time was 141. He was Chairman for 18 years and five months. His tenure was the second longest in the history of the Federal Reserve. If you are like me you are asking yourself; “Who was number one?” His name was William McChesney Martin Jr. and he held the post for 18 years and 10 months from 1951 to 1970, but back to Chairman Greenspan. During his time as the head of the Federal Reserve, he was responsible for many wise decisions. However, it is now believed, that his extended easy money policy played a huge role in the situation we find ourselves in today. While I like to point out FYI’s accurate calls, this is one I missed. It appears Chairman Greenspan was not always the “Maestro.”
That brings us to the current Chairman Ben Bernanke. He was appointed Chairman in February of 2006 by then President George W. Bush. His first term was due to expire in 2010, however on August 25 President Obama reappointed him, and if confirmed, he will serve another four years, which was viewed by many as a wise and correct appointment by President Obama. Chairman Bernanke, along with former Treasury Secretary Paulson and current Treasury Secretary Geithner, are credited with bringing the U.S. back from the edge of a repeat of the Great Depression. The policies and actions they put in place will require people with intimate knowledge of those actions to reverse them.
While I believe Chairman Bernanke deserves to be reappointed, that was not always the case. As I mentioned in the June 2007 FYI, his leadership style in the beginning, was completely different from Chairman Greenspan’s. Chairman Bernanke was a former professor and his style was “rule by committee.” Chairman Greenspan’s was not. In the previously stated FYI we discussed that only time would tell which style would be the preferred method. “A New Leader Emerges” was the title of the February 2008 FYI, Chairman Bernanke, a well-known expert of The Great Depression, had taken charge. I, for one, am thankful he did.
