Stanford Report, October 26, 2005

In Print and On the Air

By all accounts, BEN BERNANKE, the nominated chair of the Federal Reserve Board, is eminently qualified for the job, the San Francisco Chronicle reported Oct. 25. Bernanke, an assistant and associate economics professor at the Graduate School of Business from 1979 to 1985, is regarded as an economist's economist. "I think the world of [outgoing Chairman Alan] Greenspan, but Bernanke's academic credentials would exceed Greenspan's," said JOHN SHOVEN, director of the Stanford Institute for Economic Policy Research, who knew Bernanke when he was on campus. And while Greenspan was known for his cryptic remarks, there is some hope that Bernanke—who wrote an introductory textbook on macroeconomics—will bring some plain English to the Fed. "He was always a terrific teacher. He has a real talent for explaining things clearly," said JEREMY BULOW, the Richard Stepp Professor of Economics at the Business School. In Bulow's opinion, the greatest asset Bernanke will bring to the Fed is his cool. "Every now and then, there is a crisis," he said. "You need someone who is highly competent, able to think clearly, has people's trust, to be in that position when such crises develop. Ben is an extraordinarily able person."

The Los Angeles Times, meanwhile, reported that Bernanke likes problems, something he will have no shortage of as Fed chairman. However, on one hot-button issue—whether anything needs to be done to prick the so-called housing bubble—Bernanke seems to have made up his mind. During a talk on campus this year, Bernanke reminisced about moving to Silicon Valley in 1979. "We were hesitant to buy a house since I was certain that prices would never stay as high as they were at the time," he said to an audience who knew that prices have soared in the last 25 years. "Since then I've developed a view that central bankers should not try to determine fundamental values of assets."

California has been unable to raise students' reading scores from near the bottom nationally despite a decade of trying, the San Francisco Chronicle reported Oct. 20. The 2005 results of the National Assessment of Educational Progress show that the state's fourth graders scored an average of 207 out of 500 points on a reading test last spring, falling well below the national average of 217. (Math scores did show some improvement.) "This calls for some investigation," said education Professor MIKE KIRST. "Our reading instruction is clearly not paying off as well as what we're doing in math. We need to know more about what's going on, and we probably need to focus more on English-language learners." California has the nation's highest proportion of English learners.