Here is an opinion by Larry Kudlow regarding Greenspan’s successor. It is arguable that the Chairman of the Fed has more influence over your daily life then just about any public official. Decisions he makes have long-term consequences.
Financial markets and the economy have prospered mightily during the 18-year tenure of Fed Chairman Alan Greenspan, who has operated successfully with a free market supply side economic growth model that recognizes that excess money causes inflation and low tax rates promote growth. Plus he is a staunch free-trader.
Now, there is a list of current and former Bush economists that has occupied most of the speculation on Mr. Greenspan’s successor.
Two fed names are very much in the running: Roger Ferguson and Donald Kohn. Both are well-credentialed and skilled professionals. But my fear is that they do not share the maestro’s model. I worry that they believe in the so-called Phillips curve, which stipulates a false trade-off between lower unemployment and rising inflation. In this view, rapid economic growth must be stopped by the central bank in order to curb inflation. Too many people working are somehow inflationary.
Additionally, I worry that Mr. Ferguson and Mr. Kohn prefer to raise tax rates rather than reduce them.
And this would undermine economic growth incentives to the detriment of jobs, stock markets, and overall prosperity.
My view here is not factual but opinion. I don’t know the President’s mind but I am hearing these names more and more. It is my great hope that Mr. Bush will choose the best person with the free market supply side model that has governed our economy so successfully, really over the past 25 years, ever since Ronald Reagan first launched it.