President Bush made a surprise appearance this morning at the ceremonial swearing-in of Ben Bernanke, the new Chair of the Board of Governors of the Federal Reserve. Also in attendance were Bernanke’s predecessors, Alan Greenspan and Paul Volcker. In their years as Fed Chairs, Mr. Greenspan and Mr. Volcker both developed formidable political prowess to complement their economic policy skills. By the end of his tenure, Mr. Greenspan was basically a politician that wore an economist costume to work every morning. Mr. Bernanke has limited political experience, unless you count success in academia (and that may in fact count). But based on Mr. Bernanke’s remarks this morning, he seems to be off to a good start. My take is that in about a four-minute talk, he sliced up Mr. Bush this morning with a knife so sharp the pieces didn’t begin to fall off until he was back in his limo.
President Bush apparently thought it would be a good idea to steer clear of the grilling Abu Gonzalez is enjoying on Capitol Hill, and attend a happy-talk event for his daily face time instead. Mr. Bush’s appearance at the Fed was unusual, to say the least. Mr. Bernanke himself pointed out that only two other Presidents, FDR and Ford, had ever even visited the Federal Reserve Building. (“WTF are you doing here, Mr. President?”) Bernanke proceeded to rub Bush’s nose in it further by quoting Roosevelt:
In his remarks in this building in 1937, President Roosevelt described as our purpose “to gain for all of our people the greatest attainable measure of economic well-being, the largest degree of economic security and stability.”
Not exactly Bush’s agenda.
Mr. Bernanke also expressed his lack of deference to the Executive Branch in unmistakable, if indirect, terms. He pointed out that it was Congress that established the Federal Reserve, and that it is to Congress that the Fed is responsible:
I would like to extend a special welcome to members of Congress. The Federal Reserve was created by Congress in 1913 and entrusted with the power, granted originally to the Congress by the U.S. Constitution, to coin money and regulate the value thereof. Accordingly, it is incumbent on the Federal Reserve to report regularly to, and work closely with, the Congress. I look forward to a strong and constructive relationship with members of both the House and Senate.
Note the emphasis on the way the power of the Fed derives from one of Congress’s enumerated powers, to coin money and regulate its value. No Executive mandate at all.
Mr. Bernanke’s final, and perhaps most artful, cut at Mr. Bush was perhaps the best rhetorical use of non sequitur I’ve ever seen:
Mr. President, as you know, on September 11, 2001, and the days that followed, Vice Chairman Roger W. Ferguson, Jr., who just swore me in, and many members of the Federal Reserve staff–here, in New York and around the country–worked inexhaustibly to ensure the continued functioning and recovery of the American financial system. The dedication and knowledge demonstrated that day by so many people exemplifies why the Federal Reserve as an institution is far more than any single individual.
Why bring up September 11? Two reasons, I think. One was, “Oh, it’s you, Mr. President. I guess that means we’ll talk about September 11 as though it had some relevance.” The other was, “At least somebody around here knew what they were doing then.”
To my mind, Mr. Bernanke’s brief talk was a thing of beauty:
Pointing out that showing up at the Fed is something Presidents just don’t do;
Expressing deference to Congress (and not the Executive);
Quoting FDR (and emphasizing economic well-being for all Americans);
Bringing up 9/11 when it had no relevance at all, just to hold up the mirror to Bush.
Ben Bernanke is nobody’s fool. Certainly not George W. Bush’s. Mr. Bush looked happy when he left the stage. He won’t be when he gets back to the White House and his aides explain it to him.