The only puzzle in Alan Greenspan's reappointment as chairman of the Federal Reserve Board is why it took President Bush so long. If it was merely a crude effort to force Mr. Greenspan to set interest rates lower than this doughty inflation-fighter will countenance, Mr. Bush merely succeeded in rattling world markets. Just in time, the president acted before going off to the Group of Seven economic summit in London.
As America's chief central banker and chief arbiter of monetary policy, every Fed chairman has an obligation to resist the easy-money inclinations of elected politicians. This has been especially true in an era when neither the Congress nor the executive branch has done a good job in controlling deficits or fiscal policy generally.
Mr. Greenspan has detractors who blame him for the current recession. Yet the fact that the White House could find no suitable replacement and confirmation is considered a shoo-in is testimony to Mr. Greenspan's good judgment and economic expertise.