Monday, August 24, 2009

Bernanke

President Obama does it right when he would appoint current Fed Chief Ben Bernanke for another term. The only negative in this re-appointment is the cynical politics President Obama and White House is playing - first all the negative and budget deficit news are coming either when Obama is on his way to vacation (long term deficit projections increase from 7.4 Trillion to 9.0 Trillion for a decade); or when he is actually on vacation (tomorrow's mid year budget update). Secondly in order to steal the news media cycle and to show the public that indeed President is taking actions to control the impeding bad news, he brings Bernanke to his vacation spot and declares the re-appointment. This is way too cynical and sinister. President Obama loves to blame Media, but fails to avoid playing silly games of Media. Too bad.

Still there will be few voices who will object for Bernanke re-appointment - some traders (typically short side) and some foes in Congress who fault Bernanke for being a party to Housing Boom and Bust in some sense and his enormous Bank Bailout package. To be sure, Bernanke was slow to realise the unfolding challenge of Great Recession too and there is a danger that he may be late in winding down the excessive liquidity. But Boy, he indeed dealt the challenge with extra-ordinary vision and determination to act. With that accomplishment under his belt, there is a hope that he will be able 'to time' the removal of punch bowl.

In some sense, Ben Bernanke has more positive effect on lives of American and their well being than our President. Also his steady hand gives more assurance about future for Americans than our own President. It just seems unlikely that Time magazine will name any other person as the 'Person of the Year' than Ben Bernanke.

Alas, America is not like India who happily adopts a competent Money Manager as her leader.

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