Ben Bernanke has been appointed to replace Alan Greenspan, who’s been Chairman of the US Federal Reserve for just about as long as I can remember (the Volcker squeeze was in the early 80s, so he hasn’t been there forever, but it often seems that way).

Bernanke was the obvious candidate, but there was always the possibility that Bush would decide to mend fences with the base by appointing some obscure* supply-sider a la Harriet Miers.

Bernanke’s appointment suggests a general bias towards an expansionary monetary policy . He was prominent in saying that the Fed would not tolerate deflation, and could print money if necessary. More recently, he’s taken a very relaxed view of the US current account deficit, seeing it as the inevitable counterpart to a ‘global savings glut’. I agree with him on the first point but not on the second; there’s a significant risk that the wheels will fall off the entire policy, leading to a rapid depreciation of the dollar and an uncontrolled increase in interest rates.

Market movements were consistent with this analysis (stock prices went up, the dollar fell and the 10-year bond rate rose), but weren’t very big, suggesting that no-one is expecting really big changes.

* This is a redundancy, as there are no prominent supply-siders in the US economics profession. That is, not in the sense of supply-side popularised by Jude Wanniski and Arthur Laffers, although Mundell shares the supply-side liking for a gold standard. Almost all economists are supply-siders in the sense that they think attention should be paid to the supply side of the economy as well as the demand side.

“Noam Scheiber”:http://www.tnr.com/blog/theplank?pid=3075 has a brilliant plan.

bq. Our boss, Peter Beinart, has a theory about how to undercut the conservative punditry’s assault on the mainstream media: coopt it. The basic idea is that most of the conservative animus toward the MSM comes from feeling spurned by it. If that’s true, then the easiest way to fix this would be for establishment media institutions to hire lots of bright young conservatives. … I agree. But that George Will column Jason linked to earlier suggests another reason why the mainstream media might want to start hiring conservatives, at least conservative opinion journalists: It would allow conservatives to say and write what they actually think, which is usually both interesting and important. As Ryan Lizza noted last week, many of the conservatives who’ve spoken out against George W. Bush lately–people like Bruce Bartlett and David Frum–have done so at considerable risks to their livelihoods. That’s because the conservative “movement” is incredibly centralized and hierarchical. People who work at conservative think tanks or receive conservative foundation money, even people who work at conservative media outlets, risk having the plug pulled if they deviate too far from the party line.

But then “I would say that, wouldn’t I”:https://crookedtimber.org/2005/04/01/affirmative-action-for-campus-conservatives-a-modest-proposal/. Entertaining as it is to see something like my April 1 squib recycled as a quasi-serious plan of action, it can’t compete with Chris’s experience last year, of being (perhaps unintentionally) “directly”:https://crookedtimber.org/2004/12/17/the-real-threat-the-the-life-of-the-nation/ “plagiarized”:http://www.williamgibsonbooks.com/blog/2004_12_01_archive.asp#110333522580034888 by William Gibson. Now that’s real geek street-cred.

It hardly seems sporting to take another poke at Maggie Gallagher, the best-refuted woman in the blogosphere. So I won’t. Still, her Volokh posts reminded of something I read recently …

Roads To Ruin, The Shocking History of Social Reform, by E.S. Turner. (Published in 1950. You could google up a used copy for yourself somewhere. Amazon hasn’t so much as heard of it, although other curious titles tempt. Past the age of 90, the man’s most recent publication was … four days ago.)

The book’s theme:

It is a salutary thing to look back at some of the reforms which have long been an accepted part of our life, and to examine the opposition, usually bitter and often bizarre, sometimes dishonest but all too often honest, which had to be countered by the restless advocates of ‘grandmotherly’ legislation.

[click to continue…]

Matt Yglesias is “quite right”:http://yglesias.tpmcafe.com/story/2005/10/23/161832/81 when he says that Scowcroft, Wilkerson and company don’t deserve any kudos for giving the administration a few more kicks when it’s already reeling. But you can also turn this argument on its head – that they’re doing it illustrates exactly how much trouble the administration is in. While DiIulio and O’Neill dissented in the first term, neither were central figures in the administration or in the Republican movement (arguably O’Neill, as Secretary for the Treasury, should have been the former, but he was marginalized from very early on). That far more prominent Republicans* are now knifing each other in the dark tells us that the disciplining mechanisms that made “diIulio recant his apostasy”:http://www.rense.com/general32/shut.htm are breaking down very badly. Key people are calculating that they’ll be hurt worse if they stay on message and go down with the ship than if they try to get their own version of the story out while they can. It doesn’t take Thomas Schelling to tell you that situations of this kind can easily turn into a rush for the exits, as everyone tries to make sure that he or she is the first to get out, and thus perhaps to retain a few scraps of credibility. Not that this is happening yet, or necessarily will. But there’s a discernible atmosphere of deep nervousness among Republicans, which could easily explode into an out-and-out panic, given the right spark.

* Wilkerson isn’t very prominent, but Colin Powell, on whose behalf he is “very likely speaking”:http://www.washingtonpost.com/wp-dyn/content/article/2005/10/21/AR2005102101829.html, is.

Update: See also “Matt Welch”:http://www.reason.com/hitandrun/2005/10/the_week_of_the.shtml.

The New York Times “reports”:http://www.nytimes.com/2005/10/24/business/24onion.html?ei=5090&en=b40eb239c3b34014&ex=1287806400&adxnnl=1&partner=rssuserland&emc=rss&adxnnlx=1130162497-jv9RaBeQrH9+1m446sivmw (hat-tip JD – via “The PoorMan”:http://www.thepoorman.net/2005/10/24/hooray-for-freedom/ ):

bq. You might have thought that the White House had enough on its plate late last month, what with its search for a new Supreme Court nominee, the continuing war in Iraq and the C.I.A. leak investigation. But it found time to add another item to its agenda – stopping The Onion, the satirical newspaper, from using the presidential seal.

It is difficult to get a clear picture of what went on in Birmingham (England) at the weekend. But what seems to have happened is that unsubstaniated rumours of a sexual assault by members of a particular minority that was already resented for its local economic success began to circulate, and that vigilantes then felt entitled to attack random members of that group and their places of worship. Two people have died so far. The BBC has “a report here”:http://news.bbc.co.uk/1/hi/england/west_midlands/4370288.stm , and the Guardian has “some of the background”:http://www.guardian.co.uk/race/story/0,11374,1599126,00.html . A very worrying development.

I found something interesting on Boing Boing yesterday!