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Letter from America
Wider interest in who is replacing Greenspan
Fazle Rashid
10/7/2005
Alan Greenspan, the longest serving Chairman of the US Federal Reserve will quit office on January 31. Needless to point out that it is the most important office outside the poetical circle in the US. There is worldwide interest in the incumbency of the office. The attention of those deeply involved in economic activities around the world will be focused on the successor of Greenspan. President Bush has already sprang too many surprises, one more could not be ruled out. He has already said that there is still no one in his sight who would replace Greenspan. It was widely speculated that President Bush would pick one from the three names in currency to succeed Greenspan.
The men in the run for the office of the Chairman of the US Federal Reserve are Martin Feldstein of Harvard University, R. Hubbard, a former White House advisor and Ben Bernanke, Chairman of the White House Council of Economic Advisers.
President Bush has made it known that he would choose a person with whom he has personal rapport like Harriet Miers whom he has nominated on the Supreme Court bench. Miers has never sat on a court bench. But in case of the Chairman of the Federal Reserve, he must understand capital market and monetary policy.
Robert Rubin who was treasury secretary in the Clinton administration was at one point of time tipped as a strong contender for the post. President Bush once expressed admiration for Rubin. But Rubin's support for John Kerry in the last presidential elections made Bush to change his mind.
Rubin has also been a strident critic of federal budget deficits. President Bush's choice for the position of the Chairman of the US Federal Reserve will largely be influenced by Vice-President Dick Cheney, the White House Chief of Staff, Andrew Card, principal political strategist Karl Rove and White House budget director John Bolten.
Whoever takes up the post will have to confront the nagging problem of the mounting budget deficits and the large scale federal borrowings that would trigger inflation. Federal Reserve directly affects the rate of growth, job creation and rate of inflation. Initially the post is for four years but most chairmen have held the office for a longer period. Alan Greenspan had held the post for 18 years. President Bush has come under criticism for his recent appointments notably that of Karen Hughes as under secretary of state for public diplomacy.
Karen Hughes whose principal task is to rebuild shattered American image in the Muslim world has returned home empty handed from her first foreign trip that took her to Saudi Arabia and Turkey. The general perception in the US and Europe that the Muslim world and Islam is constituted by the Arab Muslims is so fallacious. The three most densely populated Muslim countries -- Indonesia, Pakistan and Bangladesh -- are not only non-Arabs but totally different from the Arabs. The only thing Arab and non-Arab Muslims have in common is religion. Befriending Arab Muslims will not end the political turbulence erupting since the grisly occurrence of 9/11 and harsh and at times brutal reaction of the West.
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