Hubbard has focused most of his research on tax policy and, like Feldstein, helped design many features of Bush's three tax cuts. But he also took on a broad portfolio of economic policy issues as CEA chairman, impressing White House colleagues with his organizational abilities, communications skills and political effectiveness, according to Hassett, a former Columbia colleague.
Hubbard was so successful in the CEA job that several observers in Washington and on Wall Street said he may have vaulted ahead of Feldstein as a likely pick, particularly by a White House that prizes loyalty and political skill.
(Ray Lustig -- The Washington Post)
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Rubin and Summers oversaw a range of economic policy issues at Treasury, including the U.S. responses to financial crises in Mexico, Asia and Russia in the 1990s.
Rubin is an investment banker, not an economist. He enjoys widespread respect on Wall Street, where he spent most of his career, rising to serve as co-senior partner of Goldman Sachs before joining the Clinton administration.
Summers is regarded as a stellar economist. At age 28 he became one of Harvard's youngest-ever tenured professors. Like Feldstein, his thesis adviser, he won the John Bates Clark Medal, which is awarded every two years to the nation's outstanding economist under age 40. He worked for Feldstein on the CEA, served as chief economist at the World Bank and did a stint as Treasury undersecretary for international affairs.
There are many other well-regarded economists at the Fed, in business and in academia who would be considered after the top four. On the Democratic side they include Ferguson and Stanley Fischer, 60, Citigroup vice chairman and former deputy managing director at the International Monetary Fund. Other Republicans are Stanford economist John B. Taylor, 57, Treasury undersecretary for international affairs, and Fed board member and Princeton economist Ben S. Bernanke, 50. A popular choice among the Fed staff would be Fed board member Donald L. Kohn, 61, who is not registered with either party.
But Rubin, Summers, Feldstein and Hubbard have emerged as the favorites partly because of the non-economic requirements of the job. Greenspan showed that a strong, politically adept Fed chairman can lead the central bank in the direction he wants while protecting the institution from White House and congressional pressure, observers agree.
"A good chairman is politically savvy enough to build good relationships so politicians don't try to infringe on the Fed's independence," said former Fed board member Laurence H. Meyer, a Democrat. "Greenspan did that. . . . Republicans, Democrats, they love him. He forged great relationships with the presidents and Treasury secretaries" with whom he served.
When Greenspan succeeded Paul A. Volcker, many in the markets and academia were not sure the new Fed chief would live up to the departing legend. Volcker, a Democrat, withstood private pressure from the Reagan administration to cut interest rates, and was subsequently eased out of the job. Reagan appointed Greenspan, a Republican, to the chairman's job in 1987.
Greenspan resisted similar public pressure in 1992 from President George H.W. Bush. The elder Bush later blamed Greenspan for contributing to his electoral defeat that year.
Over time, Greenspan worked closely with the Clinton administration, the second Bush administration and Congress on a wide variety of economic issues.
Ultimately, the success of the next Fed chief "will depend on his ability to build and preserve bipartisan credibility," said Nicolas Checa, a managing director at Kissinger McLarty Associates, an international advisory firm. "Only if you are able to transcend partisanship are you able to be a source of confidence for investors and markets."
Staff researcher Richard Drezen contributed to this report.
