Is it better to be a distinguished economics professor at Princeton or to be Chairman of the Fed? Someone asked me this question at the new faculty reception this week. I couldn't give an answer.I could have mumbled something about doing whatever makes you happiest. I could have said that Ben Bernanke preferred the latter to the former, and who are we to argue? But that wasn't really what the man was asking. Which job carries more status, he meant.
As Chairman of the Fed, Bernanke will be better known. Most successful academic economists receive the respect and admiration of a small group of academics. They spend their lives writing articles that few people read and fewer understand, and end up with fan clubs that would fit inside a phone booth. (And these are the lucky ones).
There is also the issue of power. Few of us in the profession have the power to effect change. Almost no one reads our papers, even when they're good. Every now and then, the profession stumbles upon something genuinely useful, but few policymakers really listen. As Fed Chairman, Bernanke will influence the course of human events. This, in itself, is an attraction.
The profession, though, takes a dim view of usefulness. It seeks to purge Bernanke-like ambitions from the minds of its younger members. Rarely have I observed the profession fawning over economists who get things done. The typical criticism: If you're so smart, why aren't you writing articles that only 6 people read? When a candidate with a new Ph.D. goes on the job market, his advisors generally want him to get a job at a research university. A job allows him to make policy or to interact with the "real world" in any way is considered second-best, especially if it pays a lot more money.
By the aesthetics of the profession, then, this is a clear step down for Ben Bernanke.
I, however, celebrate Bernanke's move, not least because the alternative was so much worse: There are two ways to become famous as an economist these days. One is to waste one's talents by pretending to be a writer and spouting prejudice and overwrought prose for the New York Times. The second is to become Chairman of the Fed.
If fame was what he wanted, Bernanke appears to have chosen the high road. We here at Ask Edgeworth are mightily thankful for that.