The Senate had still not acted on President Obama’s nomination of Janet Yellen to succeed Ben Bernanke as chairman of the Federal Reserve Board when rumors began appearing in print over whom the president would nominate to succeed Yellen as the Fed’s vice chairman. A New York Times headline on December 12 heralded the likely coming of Stanley Fischer, a “Central Banker in the Bernanke Mold.” Or perhaps Bernanke has all along been in the Fischer mold, since, as the Times story relates, Fischer taught Bernanke and other prominent bankers and economists when he was a professor of economics at the Massachusetts Institute of Technology. Bernanke has cited Fischer as one of his most important mentors.
Fischer, should he be chosen and confirmed, could easily accommodate himself to the programs and policies of the current board. He is already on board with the “quantitative easing” program that has the Fed buying $85 billion of bonds a month to stimulate the economy, a practice that Fischer, an adventurous sort, has called both “dangerous” and “necessary.” He was vice chairman at Citigroup between 2002 and 2005, a period in which the company’s expansion, as the Times put it, “eventually ended in a federal bailout.” Born in Rhodesia (now Zambia) in 1943, Fischer, 70, holds both U.S. and Israeli citizenship and has experience of global reach, having worked for both the World Bank and the International Monetary Fund before becoming governor of the Bank of Israel. Fischer, like Yellen, is a member of the Council on Foreign Relations, the American branch of an international society dedicated to the eventual creation of a one-world government.
A polished practitioner of the “dismal science,” he has mastered the economist’s art of making himself obscure in his speeches and writings. In that regard at least, he may be “in the mold” of former Fed Chairman Alan Greenspan, whose skill at obfuscation has drawn comparisons to Hubert Humphrey and Casey Stengel. (“If you understood what I said,” Greenspan once told a senator, “I must have misspoken.”) Fischer, no slouch at rendering the mundane obscure, is famous for writing sentences such as the following: “This paper is concerned with the role of monetary policy in affecting real output and argues that activist monetary policy can affect the short-run behavior of real output, rational expectations notwithstanding.”
The Times’ Binyamin Appelbaum, supplying a helpful translation, wrote: “Central banks in other words have the power to stimulate economic activity. Monetary policy can help countries to recover from recessions.” That, indeed, is the policy and goal Chairman Bernanke has been pursuing, “rational expectations notwithstanding.”
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