Inside the Mind of Alan Greenspan - 'ZIFFPAGE TITLEA Daunting Role '

A Daunting Role

When Greenspan retires next year, the mind of the next chairman will be judged against the synapses of his predecessor.

John Lipsky, vice chairman of JP Morgan's investment bank, says Greenspan will be hard to follow. "During his tenure, the U.S. economy returned to 40-year lows in inflation and the longest sustained expansion in modern history," Lipsky says. "The Federal Reserve's credibility is at an all-time peak."

The rumor mill has several current governors as front-runners, notably Ben Bernanke and Donald Kohn. Outsiders mentioned include Undersecretary of the Treasury for International Affairs John Taylor, Harvard professor Martin Feldstein, and former head of the Council of Economic Advisers Glenn Hubbard.

No matter who replaces Greenspan, only so much knowledge can be transferred through books of different color or conversation with the former chairman.

But while the new chairman won't have Greenspan's own expertise, instincts or intuition, he will be surrounded by the same governors, reserve bank presidents and career economists who aided Greenspan's every move. The analysis software also will still be there, providing the newcomer with the means to analyze Greenspan's past actions and their results.

"Losing talented people is something every organization has to deal with," says San Francisco Fed research chief Furlong. "But there is a large degree of continuity, an ongoing sharing and dissemination of data that takes place here."

Incoming chief executive officers at Walt Disney, Boeing, British Airways, Sony and insurer AIG generally only hope to encounter such continuity and such resources at their fingertips in their new jobs.