Bernanke Trying To Fill Greenspan's Shoes

How Did Federal Reserve Chairman Ben Bernanke Do During Wall Street Scare?

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When Wall Street went on a wild ride this week and stocks started to plummet, with just a few words, Federal Reserve Chairman Ben Bernanke was able to calm our fears.

“There is really no material change in our expectations for the U.S. economy," he said.

Tapped by President Bush to take over as fed chairman just over a year ago, Bernanke succeeded a man who spent 18 years on the job.

"Ben will replace a legend, Alan Greenspan,” said President Bush back when he appointed Bernanke. "He has dominated his age like no central banker in history."

And despite Bernanke's credentials as a Princeton professor and Fed Governor, many business leaders were concerned about the transition.

"No one is irreplaceable,” said Jack Welch, former CEO of General Electric, back in January of 2006. “But Alan Greenspan will leave a big hole that this guy will have to work like hell to fill."

Ironically, it was Greenspan's own words this week that helped add fuel to the market's fire, when he warned that the U.S. economy could be headed toward a recession.

"Greenspan is worth reporting, even if he wasn't the former Fed chairman he'd be worth reporting because he's very smart and understands the economy," says Irwin Stelzer, director of economic policy studies at the Hudson Institute.

Quietly, Bernanke has tried to put his own imprint on the economy and the Federal Reserve. But his tenure got off to a shaky start when he made an off-hand remark about interest rates, which sent stocks plummeting.

"So he made a few gaffes but basically he is a very smart guy," says Stelzer.

And Wall Street generally gives him high marks for keeping the economy on track even as it slows down. There are still challenges ahead. New home sales fell more than 16 percent in January, the steepest monthly drop in 13 years.

“I think we'll look back in history ... at an environment where Bernanke probably became as important and as noted as Alan Greenspan,” says Liz Ann Sonders, chief investment strategist, at Charles Schwab.

If Bernanke is able to manage the slowdown he'll begin to move out of Greenspan's shadow.