Word: greenspans
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Bernanke , who was named Chairman of the President's Council of Economic Advisers after serving on the Fed's board of governors for three years, believes in a predictable approach to fighting inflation. Greenspan, in contrast, is a connoisseur of esoteric statistics and counts on the freedom to weigh them however he deems wise at the moment...
...Greenspan believed targets would box him in. For example: if inflation markers were in place now, the Fed might be raising rates more quickly since hurricane damage on the Gulf Coast caused fuel prices to spike. Greenspan's approach allows him to factor in how long oil production may be curbed and what will happen when prices recede...
...main responsibilities: fighting inflation and fostering orderly growth. The two are sometimes at odds, and every Fed chairman must choose which way to lean. Greenspan, like Paul Volcker before him, is a proven inflation fighter. But Bernanke shows signs of tolerating rising prices. When the economy was threatened with deflation (generally falling prices) a few years ago, "he among all the Fed governors was most vocal about the need to generate inflation," says Alan Wild, a global fixed-income manager for Barings Bank. In November 2002, Bernanke publicly spoke of options, citing Milton Friedman's famous "helicopter drop" of money...
...Bernanke era promises to be toughest on Fed watchers who have made a living interpreting Greenspan. "Ben is crystal clear in both his writings and his speaking," says Frederic Mishkin, a friend and Columbia University economist. In Bernanke's experience, being direct works. As an 11-year-old, he won the South Carolina state spelling bee--but only after contesting a judge's ruling that he had misspelled a word. "He walked off, then came back and said, 'Excuse me, sir, but I spelled that word correctly,'" recalls his mother Edna. Sure enough, a tape recording proved him right. Bernanke...
Contrast that with the tortured, Delphic utterances that have become legend with Greenspan. His wife, NBC correspondent Andrea Mitchell, has joked that he proposed twice before she understood what he was saying. After tongue-twisting comments by Greenspan to the Economic Club in New York City in 1995, headlines reflected the confusion he had sown. GREENSPAN HINTS FED MAY CUT INTEREST RATES, read the Washington Post. DOUBTS VOICED BY GREENSPAN ON A RATE CUT, said the New York Times. But the Maestro was clear about one thing: "Since becoming a central banker I have learned to mumble with great incoherence...