Is this man the next Fed chairman?
David Weigel has a post on Slate today imagining the economic policy teams that Mitt Romney and Rick Perry would bring to the White House. Romney is easy: He’s already announced that his campaign is being advised on economics by ex-Sen. Jim Talent, ex-congressman Vin Weber and economists Glenn Hubbard and Greg Mankiw. Perry is harder. As Weigel says, Perry doesn’t have any economists, or even nationally known economic policymakers, in his close orbit.
But the most important question isn’t whom Perry or Romney would name to their economic teams. It’s whom they would name to chair the Federal Reserve.
Ben Bernanke’s term will end in 2014. It is very unlikely that a Republican president would move to reappoint him. After the time he’s had, it’s perhaps unlikely that he would even agree to serve another term.
The leading contender to replace him under a Republican administration, however, is clearly Stanford’s John B. Taylor. Taylor has a number of qualifications you don’t tend to find in the same person: He’s a respected monetary economist who authored the famous “Taylor rule,” a formula for setting interest rates; he’s a loyal Republican who has been aggressively pushing the party’s message for more than a decade; and he has Washington experience, having served as undersecretary of the Treasury for international affairs under George W. Bush.
He is also quietly campaigning for the job. If you were reading Bloomberg Views (disclaimer: I’m a contributor)on Friday, you saw an op-ed that Taylor wrote arguing that the Federal Reserve should abandon its dual mandate and focus exclusively on inflation, rather than also worrying about unemployment. Good idea? I don’t think so. But it’s an extremely popular idea among Fed skeptics on the right, and Taylor is getting out in front of it.
Taylor would also, perhaps notably, be the first-ever Fed chairman who had kept up a blog.