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ALAN Greenspan, Chairman of the US Federal Reserve, who arguably did the most powerful and influential economic job in the world, stepped down from office Tuesday at the end of a 18-year tenure. Although a committed Republican, he served under Democrat President with equal independence. His successor is Ben Bernanke, a former Fed Governor and a professor of economics at Princeston. There will be a change in the style of governance in the Fed Reserve. Bernanke's tenure will be marked by what the media here said less personalised, 'less idiosyncratic and even less mysterious'. Greenspan has strong political links. In sharp contrast to this, the incoming chairman Bernanke is apolitical. Bernanke has pledged to maintain a low political profile whereas his predecessor Greenspan gave vent to his personal views on such explosive political issues like social security and tax cuts under the Bush administration that have favoured the affluent section of the American people.
The general gossip that no one can fill the void to be left by Greenspan's exit is more a myth than a reality, the analysts said.
Greenspan is treated by many as an economic sage. Greenspan is not likely to disappear from the scene and has no plan to lead a life of recluse. He will remain totally silent about the future monetary policy but he will continue to make comments on the overall economic policies. He will write a book as is the practice with all government functionaries privy to untold stories. He plans to set up a consulting firm.
Bernanke has strong appetite for plunging into data, relentless quest for innovative ideas and producing his own formula. He hates to take everything for granted. He once noted 'setting monetary policy as similar to driving a car by looking in the rear view mirror and being uncertain as to how it would react to a tap on the accelerate or brake'.
The Federal Reserve is now free from political pressure than it was in 1987 when Greenspan began his stint as its Chairman. Greenspan avoided repeated pressure from the senior Bush to lower increase rates. President Clinton allowed Greenspan full liberty. Both Republicans and Democrats agree that the Federal Reserve's top priority is to main stable prices. The disagreement between the two parties is over where the economy is heading. But there has been a vast change in the composition of the Federal Reserve's policy making board. The position in the board left vacant by the exit of the Democrats has been filled by the Republicans by President Bush. Last Friday, President Bush nominated two Republicans to the Fed board.
Bernanke's biggest worries will be America's surging trade deficit and overall foreign indebtedness. America owes huge amount to China. The US growth rate slumped down to 1.1 per cent in the in the last three months of 2005 from 4.1 per cent in the third quarter. President Bush hosted a dinner to bid au revoir to Greenspan. The guests at the dinner were invited at the request of Greenspan. The guests included Vice-President Dick Cheney, Robert Rubin, treasury secretary under President Clinton and Vernon Jordan, a millionaire lawyer and a rabid Democratic party supporter.
Andrea Mitchell, Greenspan's wife, is a journalist and works with TV network NBC news. The political parties , both BNP and Awami League should take lesson from how two political adversaries sink their differences here in America and work hand in glove for the welfare of the nation and the people. There should be a strong bipartisan approach to such institutions like the supreme court, the election commission, the public service commission and the anti-corruption commission in Bangladesh, if the parties and leaders genuinely want to translate into reality what they publicly say.
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