Just a year after taking office, the next president will have to make a critical decision about a previous appointee: Whether to keep or replace Fed Chairman Ben Bernanke.
Mr. Bernanke, a former top economic adviser to President George W. Bush, is widely respected as an academic economist who has worked hard to maintain a nonpartisan approach. But the sagging economy raises questions about whether he will get the nod for a second four-year term.
A significant economic recovery this year could bolster Mr. Bernanke's credibility with Wall Street and the public. But continued turmoil, with fluctuating financial markets and a surge in unemployment, could increase the chances he will be replaced...
Among Democrats, likely candidates would include Janet Yellen, 61, president of the Federal Reserve Bank of San Francisco who has served as a Fed governor and economic adviser to President Clinton; Princeton professor and former Fed Vice Chairman Alan Blinder, 62; and former Treasury secretaries Messrs. Summers, 53, and Rubin, 69.
Republicans who would likely be considered include Martin Feldstein, 68, a Harvard professor and top economic adviser to the first President Bush; Glenn Hubbard, 49, the Columbia Business School dean who was an economic adviser to the current president and a contender for the Fed chairmanship when Mr. Bernanke got the job, and John Taylor, 61, a former Treasury undersecretary under the current president and economic adviser to the first President Bush who was a contender for the Fed vice chairmanship at the time.
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My Thoughts:
A recession will likely seal his fate. A Democratic victory would also be bad for him, as a Democratic president will be eager to cut all ties to Bush policies and people.
Likely, we will see slow growth in 2008. Bernanke will hang on for one additional term.
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