Wednesday, August 26, 2009

Ben Bernanke and Joe Torre

Obama tapped Ben Bernanke to serve as Federal Reserve chairman for another 4 years, but has Bernanke been good at his job? Most economists seem happy with the reappointment , I haven’t seen anyone really against.

It got me thinking though judging the quality of a Fed chair is like judging the quality of a baseball manager. Was Allan Greenspan a good Fed chair or was the economic situation such that it made him look good. One could ask something similar about Joe Torre did he manage the Yankees to several World Series titles because he was a good manager or was it mostly his players. When they didn’t win the World Series how much was his fault.

I think it is hard to separate the factors outside of the control of the Fed chairman and a baseball manager and what is in their control? I think we tend to over estimate the ability of Fed chairman and managers.

So perhaps the baseball analogy is that Bernanke has been rocked early in his start in part due to some bad defense, but managed to escape a bases loaded jam and manager Obama is going to keep him in the game.

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