Bernanke vs Bush

So this weekend, my friend and I discussed my blog over here at Financial Bullet and he was excited that he had started his political blog on his own home page here. Of course, the two worlds collided when he stated that Bernanke was more powerful than the president. I grunted my agreement at the time but then the statement started to eat at me. Just who is the more powerful? Let's take a look.

I think you have to look at what each job's responsibilities are.

First, take a look at home the Federal Reserve works and their responsibilities as a whole.

In a broader outlook the Federal Reserve has a responsibility to two things.
1) Inflation - see the long wikipedia definition here. The Federal Reserve tries to maintain a healthy balance between inflation (growing prices) and deflation (falling prices) by using the Federal Funds rate that determines borrowing costs.
2) Maintain the value of the dollar. The Federal Reserve also is responsible to monitor the dollar's value versus other currencies from around the world. Raising and lowering rates also has a direct effect on the value of the dollar.

So the Federal Reserve controls the almighty dollar. Pretty cool right? And Ben is running the show.

What does the President do?

Below is taken directly from wikipedia (I can't think of a better way of saying it.)

The President of the United States of America (sometimes referred to as POTUS)^[1] is the head of state and head of government of the United States. The president is at the head of the executive branch of the federal government, whose role is to enforce national law as given in the Constitution and written by Congress. Article Two of the Constitution establishes the president as commander-in-chief of the armed forces and enumerates powers specifically granted to the president, including the power to sign into law or veto bills passed by both houses of Congress, to create a Cabinet of advisors, to grant pardons or reprieves, and, with the "advice and consent" of the Senate, to make treaties and appoint federal officers, ambassadors, and federal judges, including Justices of the Supreme Court.

So the President seems to have a bit more power. He can make or break laws, develop foreign and domestic policy, and is the head of the military? Seems that Mr. Bush has more far-reaching power. And when the President speaks on the economy, he carries just as much weight in the markets as Bernanke.


Oh, and by the way, President Bush nominated Bernanke to succeed Greenspan as Fed Chair. Enough said.