Talking points

Since July, George W. has nominated two Supreme Court justices, and now Ben Bernanke as Federal Reserve Board chairman. It's good to be king.

Unlike lifetime Supreme Court justices, a Fed chair serves a four-year term and can be replaced relatively quickly. In some respects, Fed chairs are more influential than justices. They wield almost mythic power: By tweaking lending rates and injecting new money into the economy, the Fed can greatly influence the global economy. In 1987, within just two months of Alan Greenspan's taking the seat, the stock market crashed and then recovered.

Could a chairman use his powers to his or a president's political advantage? The inflation of the 1970s has been blamed on then–Fed chairman Arthur Burns, who pumped money into the economy to help Richard Nixon's reelection campaign. Greenspan—appointed by Reagan—is an Ayn Rand free-market libertarian. "He's presided over a transfer of money from taxpayers to rich people," says one successful Chicago hedge-fund expert, who declined to be named. Others praise Greenspan for keeping watch over a stable economy. These activities could be interpreted as forwarding or impeding the sitting president's agenda.

The chairman is also the chief authority in policy hearings on how to manage the economy. Supply-side economists—many of whom are Republicans—argue that tax cuts are the key to economic growth; by appointing a like-minded Fed chair, a Republican president could achieve this goal.

Though it has been used politically, the Fed is unwieldy as a political tool. It can take months or years before the effects of the Fed's blunt tools kick in. And there's no guarantee that such measures will have their intended effect. Considering its ability to form public perception of weighty issues—such as, notably, civil liberties—the Supreme Court is a far more efficacious tool for shaping the cultural landscape.

Bernanke is viewed as a prudent choice for Bush, who needs to gain points from both Democrats and disgruntled Republicans. For one, Bernanke is actually qualified. He was the economics chair at Princeton University before taking his post as chairman of the U.S. President's Council of Economic Advisers. He has already served on the Fed board, is highly respected by moderates both on Wall Street and in academia—and Paul Krugman reported in The New York Times on October 28 that he is "a policy activist who advocates aggressive government moves to jump-start stalled economics."

After the embarrassing Harriet Miers business, it would be a mistake for Bush to recommend anyone with serious right leanings. But even if he did, it probably wouldn't be as politically controversial as the Supreme Court debate continues to be.—Peter Zelchenko