CEOs Offer Their Advice to Bernanke

 

Nov. 14, 2005-- The Senate Banking Committee on Wednesday approved the nomination of Ben Bernanke, President Bush's pick to succeed Alan Greenspan as Federal Reserve chairman, just one day after his hearing on Capitol Hill. Bernanke's nomination now moves on to the full Senate.

If confirmed, this will not be Bernanke's first trip to the Fed. From 2002 to 2005, he served as a Fed Board governor where his views largely conformed to Greenspan's aggressive inflation fighting measures. In 2005, President Bush selected Bernanke to head the Council of Economic Advisers.

Appearing before the Senate committee on Tuesday, Bernanke discussed intricate policy points where his views differ from Mr. Greenspan -- namely on setting an explicit target for inflation. Some economists fear that inflation targets might force the Fed to increase rates without regard for the potential to stifle economic growth. Bernanke said that he would remain mindful of the connection between interest rates, economic growth, and employment.

Bernanke also affirmed his view that the Fed must remain independent of political influences. This appeased senators' concerns that Bernanke was too closely aligned with the Bush administration and its support for tax cuts in the face of mounting fiscal deficits.

On the eve of the confirmation hearing, Inc.com asked CEOs of fast-growing private companies to share their thoughts and concerns regarding Bernanke and the likely direction in which he will steer monetary policy. Here's some of what they had to say:

Gary Pudles, CEO of AnswerNet, a Princeton, N.J.-based answering service

"Bernanke has to have the discipline to steer us out of serious financial trouble. Today, businesses experience higher highs and lower lows, and therein lies the biggest challenge."

Seth Goldman, CEO of Honest Tea, a Bethesda, Md.-based iced tea company

"I applaud the notion that Bernanke's trying to make economic conditions more predictable with an inflation target."

Martin Klein, CEO of Loyalty Builders, a Portsmouth, N.H.-based marketing consultancy

"If credit is tight, business will be hurting and reluctant to spend money. This has been addressed really well by Greenspan. I have no reason to suspect that Bernanke should be any different, or any less business friendly."

Kevin Grauman, CEO of the Outsource Group, a Walnut Creek, Calif.-based professional employer organization

"He may prove to have a better impact on the economy than Greenspan did because he speaks much more clearly. I think his approach will demystify much of what goes on at the Fed. That's better for business because there are no surprises."