White House gamble pays for Princeton professor

If the Senate confirms him, Bernanke will arguably become the most powerful economic leader in the world. Not since Arthur Burns, the Federal Reserve chairman from 1970 to 1978, has a university professor run the nation’s central bank.

But while Washington policy making may be Bernanke’s newly chosen field, no one seems to have a clear idea what his political views are, other than the fact that he is a registered Republican. Greenspan took strong political positions, using his pulpit at the Fed to promote Social Security private accounts and to sell the president’s tax cuts. Bernanke, in contrast, has been muted on such political hot potatoes even as the president’s chief economic adviser.

Now, as he moves to the Fed, he is likely to steer the central bank away from the broader political debate. Bernanke, 51, is more like a “Mr. Smith Goes to Washington” than the political figure that Greenspan already was when he became Fed chairman in 1987. Appointed a Fed governor in August 2002, Bernanke from the start considered his term in Washington as a time-out from academia.

But Washington grew on him. His friend, Gene M. Grossman, another Princeton economist, said that Bernanke “thought it would be informative and interesting to actually work on policy. And then he found he was enjoying it and he was good at it,” he said.

As a professor he wrote dozens of papers on economics and was the co-author with Robert H. Frank of Cornell University of an economics textbook for beginners. He is credited with coining the term “savings glut” to help explain the huge American trade deficit that is largely financed by the savings of foreigners.

While Frank wears his politics on his sleeve, Bernanke does not.

— NYT