It's a strange job, this chairman of the Federal Reserve gig. Some people (including most of the media and some in political power) seem to think of the chairman as the maestro of the entire global economy.
To those of us who know the real story—that the economy actually is, left to its own devices, a bottom up, complex adaptive system—the idea of a captain tweaking the controls is either laughable (in its impotency) or maddening (in the damage being caused).
Personally, I'd prefer to see the whole role made redundant, or at least savagely demoted. And I'd like to see the chair and much of the entire board wrestled back from the academics that have dominated it for around 25 years. That other great experiment in top down, planned economics, the Soviet Union, lasted about 70 years. So respite might take a while yet.
I was very happy when Larry Summers dropped out of the race for next chairman, mainly because I wouldn't trust him to run my son's $500 government-guaranteed bank account. But Janet Yellen might be no better, and may be worse. Yellen's view of savers is scary indeed.
But life is too short to stress over things unchangeable. Let's instead have some fun with it. Given the role of selecting the next Fed chair, who would you pick? Assume that political connections, plausibility nor desire for the job are requirements. You've got a pool of 7.125 billion potential candidates. Who would you give the job?
Assuming we must have a Fed chairman manipulating the price of money in the first place, then I think their most important role is to identify bubbles and lean into the wind. At the very least, they should not be inflating bubbles deliberately to achieve some short term economic and political goals.
So for me, the choice is an easy one—Jeremy Grantham of GMO LLC must be among the best in the bubble-hunting business. He spotted every bubble that Greenspan and Bernanke missed, and he won't miss any of the ones that Yellen is likely to miss.
If you don't read Grantham's quarterlies, head to the GMO website and sign up (it's free).
Do you have a better candidate?