Paul Krugman’s column today discusses who might become the next Chairman of the Federal Reserve after Alan Greenspan retires next year. Our Paulie thinks this might be something of a problem:

One Fed chairman famously described his job as being to "take away
the punch bowl just when the party gets going." Bond and currency
markets want monetary policy in the hands of someone who will say no to
politicians. When a country’s central banker is suspected of having
insufficient spine, the result is higher interest rates and a weaker
currency.

Today it’s even more crucial than usual that the Fed
chairman have the markets’ trust. The United States is running record
budget and trade deficits, and the foreigners we depend on to cover
those deficits are losing faith. According to yesterday’s Financial
Times, central banks around the world have already started shifting
into euros. If Mr. Greenspan is replaced with someone who looks like a
partisan hack, capital will rush to the exits, the dollar will plunge,
and interest rates will soar.

He then goes through a list of potential contenders and doesn’t think all that much of any of them. Here’s an idea.
The US needs an independent as Greenspan’s replacement, someone who is willing to say boo to a goose, someone to constrain the government’s actions. They need to be at least a competent economist, preferably one that is more than just competent. A public profile is necessary, it helping to insulate that person from political pressure. Who, who could we find? You might find this a little odd but I have just the choice. Winner of the John Bates Clark Medal, a likely future Nobel winner, public intellectual, tenured professor, certainly very clear views on future economic policy. Yes, I suggest this man.

Sorry, what was that? Ah, yes, I seem to have missed this little bit:

If Mr. Greenspan is replaced with someone who looks like a
partisan hack, capital will rush to the exits, the dollar will plunge,
and interest rates will soar.

Other than that Paul Krugman’s perfect.

Ho hum, next candidate please.