The following are excerpts from speeches by Ben S. Bernanke, President Bush's nominee for chairman of the Federal Reserve Board.
"Oil and the Economy," Oct. 21, 2004
"What accounts for the behavior of the current and expected future price of oil? The writer George Bernard Shaw once said that, to obtain an economist, it was only necessary to teach a parrot to repeat endlessly the phrase 'supply and demand.' Well, as an economist, I have to agree with the parrot. For the most part, high oil prices reflect high and growing demand for oil and limited (and uncertain) supplies."
"What Have We Learned Since October 1979?" Oct. 8, 2004
"Monetary policymakers will generally find it advantageous to commit publicly to following policies that will produce low inflation. If the policymakers' statements are believed (that is, if they are credible), then the public will expect inflation to be low, and demands for wage and price increases should accordingly be moderate. In a virtuous circle, this cooperative behavior by the public makes the central bank's commitment to low inflation easier to fulfill. . . .
"The benefit of appointing a hawkish central banker is the increased inflation-fighting credibility that such an appointment brings. The public is certainly more likely to believe an inflation hawk when he promises to contain inflation because they understand that, as someone who is intrinsically averse to inflation, he is unlikely to renege on his commitment."
"Fedspeak," Jan. 3, 2004
"There was a time when central bankers did not talk to the public. Montagu Norman, governor of the Bank of England for a quarter of a century after the First World War, was notorious for his reclusiveness, both personal and professional. According to his biographer, Norman lived by the maxim, 'Never explain, never excuse.' Norman was hardly unique. Central bankers long believed that a certain 'mystique' attached to their activities; that making monetary policy was an arcane and esoteric art that should be left solely to the initiates; and that letting the public into the discussion would . . . degrade the effectiveness of policy.
"Central banks around the world have become noticeably more open and transparent over the past 15 years or so. This is a welcome development. As public servants whose policy actions affect the lives of every citizen, central bankers have a basic responsibility to give the public full and compelling explanations of the rationales for those actions. Besides satisfying the principle of democratic accountability, a more open policymaking process is also likely to lead to better policy decisions, because engagement with an informed public provides central bankers with useful feedback. . . . [Another benefit] is a reduced risk that market-sensitive information will dribble out through inappropriate channels, giving unfair advantage to some financial market participants."
"On Milton Friedman's Ninetieth Birthday," Nov. 8, 2002
"I first read 'A Monetary History of the United States' early in my graduate school years at M.I.T. I was hooked, and I have been a student of monetary economics and economic history ever since. . . .
"Friedman and [his co-author Anna J.] Schwartz made the case that the economic collapse of 1929-33 was the product of the nation's monetary mechanism gone wrong. . . . What I take from their work is the idea that monetary forces, particularly if unleashed in a destabilizing direction, can be extremely powerful. The best thing that central bankers can do for the world is to avoid such crises by providing the economy with, in Milton Friedman's words, a 'stable monetary background' -- for example as reflected in low and stable inflation.
"I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."