Could Greenspan stay on a little longer? Well, sort of... William J. Polley: May 2005 Archives

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Could Greenspan stay on a little longer? Well, sort of...

Ok, so this caught my eye today: (Reuters)

WASHINGTON (Reuters) - The Bush administration is considering whether to ask Federal Reserve Chairman Alan Greenspan to stay in office a few months past the end of his Fed board term, which expires on Jan. 31, The Washington Post reported on Wednesday.

The newspaper said the delay would give the White House more time to conduct the search for a successor, which could include corporate leaders.

A quick check of 12 USC 242 reveals:

...Upon the expiration of their terms of office, members of the Board shall continue to serve until their successors are appointed and have qualified. Any person appointed as a member of the Board after August 23, 1935, shall not be eligible for reappointment as such member after he shall have served a full term of fourteen years.

So it is possible that he could stay on if Bush has not appointed a replacement by the end of January (of if the appointee has not been confirmed by that time). I also suppose that he could announce his intention to resign on Jan. 31 even if a replacement hasn't been found. Wouldn't that be an interesting prospect?

Anyway, I am not foolish enough to make book on whether Bush will appoint someone and whether that person will be confirmed by Jan. 31. (Are you watching C-Span2 today?) But if the President is listening, I have a little advice. Appoint a replacement sooner rather than later and make sure he or she can be confirmed without threat of a filibuster. The markets will thank you. Don't play games with Fed chair appointments. Especially on a day like today, this sort of news gives me an uncomfortable feeling.

Greenspan himself recently took the opportunity of a commencement speech to point out that his time at the Fed is coming to an end.

Dean Harker, members of the faculty, Wharton alumni, friends and families and, especially, members of the 2005 graduating class. I have more in common with you graduates than people might think. After all, before long, after my term at the Federal Reserve comes to an end, I too will be looking for a job.

The entire speech to the graduating class at Wharton can be found here.

UPDATE: Mark Thoma turns the mic over to Tim Duy for today's Fed watching post. Looks like he basically agrees with me:

More generally, what does the difficulty of finding names say about the importance of Greenspan? I don’t want to believe that only he can do this job. If the Administration delays his retirement, it suggests that this is true, casting a pall over Greenspan’s eventual successor and diminishing their credibility. Is this how we want to start off the tenure of fresh blood in the Chairman’s seat? I don’t think so. Maybe the blogging community should turn a fresh eye to the question of possible names to replace Greenspan….

Can we all say it together? Appoint a successor sooner rather than later and don't play games with this position.

UPDATE AGAIN: Edward Gramlich announced his intention to resign his post at the Board at the end of August.

Gramlich, Bernanke, Greenspan. Lots of big shoes to fill.