Bernanke In China: Should He Have Gone?
As we've said (with CNBC's Carl Quintanilla's on-the-scene reports), U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are in China this week. They're addressing issues the Bush administration - and Democrats for that matter – have with China's monetary and trade policies.
To some here in the states, that’s the problem. While Paulson is a chosen proponent of the administration, the Fed has been historically independent of the White House and Congress. So has Bernanke made a mistake by going? The question was asked on "Squawk on the Street."
Stephen Moore is on The Wall Street Journal’s editorial board. As far as he’s concerned, it’s important for the Fed’s credibility to remain separate from the president. “His going on this trip, I think, indicates that it’s a tacit endorsement of the Bush administration’s policy,” Moore says, “and I’m not even sure it’s good policy.”
“Let’s face it,” says Tim Kane of the Heritage Foundation, “most people watching our channel here think that [former Fed chief Alan] Greenspan’s still in charge. So Bernanke actually needs to build up some credibility.” Having the most powerful man in the world when it comes to these monetary and banking issues there in China is a good decision, he says. “If it’s a risk for Mr. Bernanke to take, it’s a good risk to take.”
Both men told CNBC's Mark Haines that while they disagreed about Bernanke’s attendance on the China trip, neither one of them thinks that the present trade deficit or a devalued yuan is a threat to the U.S. economy.