Business Reporters Put Fed Nomination into Greater Context

The business press didn't get much of a head-start before President Bush stood at a podium and named Ben Bernanke to replace Alan Greenspan as head of the Fed. But they rallied before and after the announcement to put the latest buzz in the greatest context.

Most stories leading up to yesterday afternoon's announcement had named Bernanke, the president's top economic advisor, as a top choice for the post of Federal Reserve Chairman, among others such as Columbia professor Glenn Hubbard, Harvard economist Martin Feldstein and Greenspan favorite and second-hand man Donald Kohn.

Several reporters pointed to polls and surveys of economists, from Tradesports.com to WSJ.com to Lehman Brothers, all of which ranked Bernanke, chairman of Bush's Council of Economic Advisers, as either first or second choice for the job.

But reporters were still careful to hedge those bets before the announcement, highlighting past appointments when Bush dispensed with the conventional short lists.

"Speculation remains rampant, especially after Bush's surprise pick of Harriet Miers for the Supreme Court. Critics say she's a Bush crony with limited qualifications," wrote Investor's Business Daily reporter Kirk Shinkle in his story late last week. "Choosing a relative unknown or a close political ally for the Fed could wreak havoc on markets."

After the announcement, confidence hiked up several notches, as business reporters quoted much appeased sources who now called Bernanke "the most likely" successor.

"The main reaction will be a sigh of relief that he is one of the mainstream, qualified candidates," an economist said in an Associated Press piece by business reporter Christopher Wang.

Reporters headed straight to Wall Street for reactions as well, writing that stocks rose in approval. Bloomberg and TheStreet.com, however, added that Bernanke's inflation-friendly views may have scared other markets, as bonds fell and the dollar weakened after the news.

Bloomberg reporter Elizabeth Stanton also put that soured reaction into context, using history to help foretell the future. "Treasuries also fell the day then-President Ronald Reagan nominated Greenspan to succeed Paul Volcker as Fed chief," she wrote. "The dollar fell 2.2 percent versus the yen on June 2, 1987. It recovered more than half of that loss during the following two days, according to Bloomberg data."

Speaking of history, some stories before and after the announcement took a deeper look at the departing economic leader. Describing Greenspan as a "Fed legend," business reporters stressed his 18-year tenure's high points, including opening the complex economic entity to the public, foreseeing the tech bust and winning board consensus on most matters. They also revealed a few more private points, such as his "mean" sax-playing skills and two-hour bathtub soaks each morning when he pored over updated economic data.

Still, the timing startled many business reporters. Headlines that Bush would name Greenspan's successor hit the wires about two hours before the press conference, forcing reporters to dig up background information on each of the front-runners within minutes. That was a switch from reports in the last week or two from USA Today and MarketWatch.com that anticipated a nomination nod no earlier than next month or even December.

Reporters searched beyond business headlines to explain the revised timeline to readers. "Announcing Greenspan's successor also provided a diversion for a White House reeling under congressional criticism of the Harriet Miers' Supreme Court nomination and a federal investigation into whether top officials leaked the name of a CIA operative for political reasons," wrote Associated Press reporter Tom Raum.

The news may have been abrupt. But business reporters have plenty of time between now and Jan. 31 -- Greenspan's last day -- to explain what it means for the country's economic future.

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism