On the education of Bernanke the Fed Chairman...

It's good to read a nicely written profile on Ben Bernanke, the Fed Chairman, so shortly after I was putting down thoughts on Greenspan and Bernanke.

I have no doubts that Bernanke is a fine academic, and along the way, finds his style in leadership. While more transparency is almost always a good thing than less of it, in the case of the Federal Reserve, I'm not sure if it's totally true. Perhaps one thing that his decades long study doesn't reveal in quantitative research is that, as globalization gets stronger, the power of the Fed can get progressively constrained. Hence, a large part of Fed's power lies in its mystic of its aura, and Greenspan certainly works the magic. The Brits know it well too. But I'm not sure if Bernanke understands or fully appreciates its power of enigma.

Oftentimes, one learns fast in trial-by-fire. In Greenspan, he has a few medals under his belt (the Black Monday of 1987; the 1997 financial meltdown from Asia; the default of Russia; to name a few). For Bernanke, his first test will be the 2007 subprime mortgage mess. Only time will tell if he's going to make it through smoothly. He certainly shows more creativity than Greenspan than simply words (the cryptic speech in the Open Market Committee) and rate cut/increase. But with the Fed much reduced from the Greenspan days, would it work? I certainly hope so, but at times, Bernanke's candid persona (that he's not sure) does not inspire confidence. That's no fault on his part, but human nature as it is, we always hope that someone of higher order would know how to steer the ship in choppy water.

Perhaps, as the article sums it up well, that his education has only just begun.