Would the U.S. ever hire a foreigner to head the Federal Reserve?

Britain has tapped a Canadian — and one of the financial world's brightest lights — to lead the Bank of England. Perhaps the U.S. should recruit from abroad, too

Canadian Mark Carney will cross the pond to become the first foreigner to head the Bank of England.
(Image credit: AP Photo/The Canadian Press, Adrian Wyld)

This week, the British government announced that it had tapped Mark Carney, the governor of the Bank of Canada, to lead the Bank of England, making him the first foreigner to head the institution in its 318-year history. It is the financial world's equivalent of a blockbuster trade in sports, and Carney was instantly compared to Sven Goran Erickson, the Swede who was brought on to manage England's notoriously underperforming soccer squad during the 2002 and 2006 World Cups. Carney's appointment is seen within Britain as a spectacular coup for the government of Prime Minister David Cameron, who may need some serious financial star power to prevent his country from sinking into an unprecedented triple-dip recession. Carney has been praised for his stewardship of Canada's banking system, which — in stark contrast to the U.S., Britain, and much of Europe — survived the financial crisis without a single expensive bailout. Not unlike its soccer team, the British economy has been plagued by "a string of catastrophic performances," and there was "a lack of enthusiasm for any of the homegrown candidates" to lead it out of the wilderness, says Larry Elliott at The Guardian, making the recruitment of a foreigner all the more palatable.

From an American perspective, the equanimity with which the British public has greeted the prospect of a foreigner running the country's central bank is intriguing. One can only imagine how such a move would be greeted by more conspiracy-minded quarters in the U.S. — the first step in the United Nations' dastardly plan to indoctrinate our children! — particularly if it was carried out by a president whose own citizenship has been such a chronic source of controversy.

But why should hiring a foreigner to succeed Chairman Ben Bernanke at the Federal Reserve be such a stretch of the imagination? It is mainly a technocratic position. The chairman is charged with encouraging maximum employment and stable prices. There is nothing in the job description that would disqualify, say, Mario Draghi of Italy. The head of the European Central Bank has been widely credited with helping stabilize the European debt crisis, slicing through a Gordian knot of competing national interests that has made the dysfunctional U.S. Congress seem like a model of efficiency. Leaving general objections to quantitative easing aside, Draghi seems like the type of financial whiz who could at least be considered to steer the Fed in the coming years, as it seeks to extract its tentacles from the financial system. But you can easily imagine that many Americans would immediately view his Italian citizenship as grounds for automatic disqualification.

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The question, of course, gets trickier with cabinet positions related to national security, like the secretaries of defense or state. It seems unlikely that large swaths of the American public would ever trust an Indian, a Brazilian, or — God forbid — a Frenchman to act in the national interest. But is the idea really so strange? The U.S., after all, prides itself on being a nation of immigrants. The current president is but one generation removed from Kenya. Former Secretary of State Madeleine Albright was born in Prague. And during President Obama's tenure, the mandarins of American government have grown only more diverse. Gary Locke, whose grandfather immigrated from China, became the first Chinese-American to hold the position of commerce secretary, and has since gone on to become the U.S. ambassador to China.

Perhaps Americans prefer their officials to be forged in the crucible of the American experience, and steeped in its egalitarian values. There is certainly value in that. But plenty of foreigners have unique skills and insight to offer. Their lack of a U.S. passport should hardly be a disqualifying factor.

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