What must a good Fed chair do?
1. He should have a mastery of data and an understanding of the macroeconomy. He must not be a dogmatist. Bernanke gets an A or A+ here.
2. He should have the ability to lobby the President and Congress for support. It is not clear who is listening but Bernanke gets in relative terms at least a B+ here.
3. He should have the personality to hang tough. This requires the "test of time" but we have no reason to be pessimistic.
4. He should recognize that the Fed can only succeed if fiscal policy is responsible. Give him an A.
5. He should be credible abroad and on Wall Street. Bernanke is not fully senior in this regard, at least not within the policy community, but he could achieve this stature within a year’s time. B.
6. He should have that Greenspan magic touch. Grade?????
Next I will post on Bernanke’s contributions to economics. Comments are open…