Markets, financial analysts, economists, pundits, and really, just about everybody, reacted favorably to President Bush's appointment of Ben Bernanke to succeed Alan Greenspan at the Fed.

Markets, financial analysts, economists, pundits, and really, just about everybody, reacted favorably to President Bush's appointment of Ben Bernanke to succeed Alan Greenspan at the Fed. Liberals exulted that Bush had not picked a supply-side crazy, their evidence being that some supply-siders had criticized Bernanke. But supply-siders disagree among themselves about monetary policy all the time, and most of them were happy enough with the nomination. Bernanke is an inflation hawk who believes that the Fed should set clear rules to govern monetary policy. His official actions will be more important than any advice he might give to lawmakers. But that advice is also likely to gladden supply-siders. While his views may change over time, he has said that Bush's tax cuts have helped the economy and should be extended. The markets' exuberance about the news of his selection seems to us entirely rational.