WASHINGTON, Jan. 30 The important presidential nominee who is scheduled for
a vote in the Senate on Tuesday is widely regarded as brilliant, has ties to
Princeton University and, if confirmed as expected, will influence the lives of
ordinary Americans for years to come.
Judge Samuel A. Alito Jr. for the Supreme Court?
No, this is the other important nominee Ben S. Bernanke for chairman of the Federal
Reserve.
Wall Street may be intensely interested in just about every word ever uttered
by Mr. Bernanke, the former Princeton economist and chairman of the White House
Council of Economic Advisers who is President Bush's choice to succeed Alan Greenspan.
But in Washington, he is barely on some people's radar screens. Indeed, here
is what Senator George Allen of Virginia, who is considering a bid for the
Republican presidential nomination in 2008, said when asked his opinion of the
Bernanke nomination.
"For what?"
Told that Mr. Bernanke was up for the Fed chairman's job, Mr. Allen hedged a
little, said he had not been focused on it, and wondered aloud when the hearings
would be. Told that the Senate Banking Committee hearings had concluded in
November, the senator responded: "You mean I missed them all? I paid no
attention to them."
He was not the only one. Senator John McCain, Republican of Arizona, regarded by some as
a front-runner in 2008, also had no idea that the Bernanke hearings had come and
gone.
While lawmakers and the public have been focused on the nomination of Judge
Alito, who is also scheduled for a vote on Tuesday, Mr. Bernanke has become a
rarity in modern Washington: the noncontroversial nominee.
True, monetary policy no longer ignites ideological passion the way it did in
the days of double-digit inflation. Still, the job that Mr. Bernanke, 52, is
ready to assume hardly lacks consequence. As Federal Reserve chairman, Mr.
Bernanke, considered one of the nation's pre-eminent monetary economists, would
arguably be the most powerful economic figure in the world, his every remark
having the power to move markets.
Unlike Judge Alito, Mr. Bernanke would not be receiving a lifetime
appointment; the term of a Fed chairman is just four years. But Mr. Bernanke is
also being appointed to a 14-year term as a member of the Fed's board of
governors, and under Fed rules would be eligible for reappointment as chairman
for the life of that term. Mr. Greenspan, who served one partial term and one
full term as a Fed governor, was chairman for 18 years.
That is long enough to have an extraordinary impact, and Fed chairmen often
do. Their decisions affect many aspects of American financial life, including
such things as increases in Social Security payments and how much interest
people pay to borrow against the equity in their homes or to finance the
purchase of a new car.
Senator Richard C. Shelby, Republican of Alabama and chairman
of the banking committee, said the Fed chairman was "a lot more important, in
the context of everyday life of the economy," than a member of the Supreme
Court.
Allan H. Meltzer, a professor of political economy and public policy at
Carnegie Mellon University, who is writing a history of the Federal Reserve,
felt similarly. "Bernanke is certainly every bit as important as Alito," he
said.
Professor Meltzer contended that the banking committee gave Mr. Bernanke "a
free ride" during his confirmation hearing, which lasted only one day. During
the session, Mr. Bernanke said continuity with the Greenspan era would be his
top priority.
"I think they could have pushed Bernanke a little bit more on the questions
of how he saw the job and what objectives he was going to pursue," Professor
Meltzer said, including "how he thought about the problems of reconciling full
employment and low inflation did he think the Fed had other responsibilities.
It seemed to me they really didn't lay many gloves on him."
Perhaps that is because relatively few people outside the world of finance
seem to know who Mr. Bernanke is. There are no outside interest groups
broadcasting television ads for and against him, no protests, no polls. His
nomination received such scant attention that the Pew Research Center for the
People and the Press, which tracks how closely people follows news events, did
not bother to monitor it.
"I think he has negative name recognition," said Andrew Kohut, the center's
director. "We didn't cover it, and I don't think anyone else did."
Economists are a bit mystified, though not entirely surprised. The Alito
hearings were brimming with controversy, from the judge's membership in a
Princeton University alumni group that fought against affirmative action to a
20-year-old memorandum in which he said that the Constitution did not provide a
right to an abortion.
The Bernanke hearings, by contrast, centered on the world of monetary policy,
a field where most of the big ideological fights were settled long ago.
"Monetary policy has become much less political than it used to be years back
and centuries back," said Alan S. Blinder, a former Fed vice chairman who is a
professor of economics at Princeton, where he was a colleague of Mr. Bernanke's.
"There's a consensus on what monetary policy should be doing, which is to say
keeping inflation low and, subject to that constraint, keeping employment high.
So politicians take this attitude that it's for technocrats, and it doesn't
matter too much whether the guy is a Republican or a Democrat."
Mr. Bernanke, for the record, is a Republican, though some of his close
colleagues in academia said they did not know his political affiliation until he
went to work for Mr. Bush. His nomination was announced last fall, days before
Harriet E. Miers, the White House counsel, withdrew as
a nominee to the Supreme Court amid accusations of political cronyism; picking
Mr. Bernanke helped Mr. Bush fend off those charges.
Even so, Mr. Bernanke's relationship with the president came up in his
confirmation hearings, as Democrats pressed him on whether he would be
independent of the White House.
But it was a Republican, Senator Jim Bunning of Kentucky, a longtime critic
of the Fed, who cast the lone vote in the committee against him, saying he did
not regard Mr. Bernanke as independent enough from Mr. Greenspan. Senator Charles E. Schumer, Democrat of New York, who serves on
both the Judiciary and Banking Committees and who led the charge against Judge
Alito, came out strongly in favor of Mr. Bernanke.
"They avoided the equivalent of Samuel Alito in a monetary sense," Mr.
Schumer said. "They didn't pick a strict monetarist. They didn't pick somebody
who was tax cuts over everything else. They picked a mainstream guy, and if
there was ever proof that Democrats would support the president's nominee, it
was Bernanke."
So unlike Judge Alito, who is expected to be confirmed by a vote pretty much
along party lines, Mr. Bernanke is likely to receive the overwhelming support of
the Senate, even if some prominent members are not quite up to speed on his
views.
Mr. McCain who joked during a 2000 presidential debate that if Mr.
Greenspan died, he would "prop him up and put a pair of dark glasses on him," in
a repeat of a prank in the movie "Weekend at Bernie's" said he did not know
too much about Mr. Bernanke, but was comforted to know that Mr. Greenspan had a
high opinion of him.
"It hasn't gotten a lot of attention," Senator McCain said, "but I think
he'll be carefully scrutinized in his hearings, and the view that other people
have of him will carry a lot of weight in the financial world, particularly
Greenspan."
Mr. McCain was asked if he would be surprised to learn that the hearings were
over. He paused, his eyes widening, before giving the verbal equivalent of a
knock on the forehead: "You're right, you're right, you're right.
Duuuuuh."
