Washington — Armed with an unusual biography and international respect as a leading economist, Stanley Fischer, an Israeli-American dual national, is poised to take his place as vice chairman of the Federal Reserve System, the body that effectively controls America’s money supply.
Fischer’s nomination by President Obama is a first of sorts. Up until last year, Fischer was serving as head of the Bank of Israel, more or less the Fed’s counterpart institution in the Jewish state. But apart from complaints from some traditionally harsh critics of Israel, who argued that his role in Israel makes his prospective new role on the Fed incompatible with American interests, Fischer’s assumption of his new post has drawn nothing but praise.
Alan Blinder, who served as vice chairman of the Fed’s Board of Governors during the Clinton administration, typified the mainstream response to the now all-but-sure prospect of Fischer’s appointment.
“He is a very fine economist who has distinguished himself in several dimensions,” said Blinder, a renowned economics professor at Princeton University. “He wasn’t born in America, and he has a lot of international experience, but he is an American economist.”
Responding to Fischer’s critics, Blinder said: “There’s no conflict. What the Bank of Israel does has minimal implication for other countries.”
The Senate Banking Committee confirmed Fischer’s appointment to the Fed’s Board of Governors on May 21. Fischer still awaits a separate vote approving his post as vice chairman, but given the two-thirds majority of senators that backed his board membership, confirmation as No. 2 at the Fed is guaranteed.
An acclaimed banker and economist, Fischer comes to the position with a breadth of international experience. He was born to a Jewish-Zionist family in what is now Zambia, grew up in Zimbabwe, spent six months on a kibbutz in Israel, then settled in the United States for four decades before immigrating to Israel upon being invited by Prime Minister Benjamin Netanyahu to serve as governor of the Bank of Israel.
Fischer’s ties with Israel date back to his childhood in Southern Rhodesia, which is now Zimbabwe. He was a member of the Zionist-socialist Habonim youth movement, with which he visited Israel in 1960. He later came back and studied Hebrew at Kibbutz Maagan Michael, on the Mediterranean coast. But it would take another four decades before Fischer would return to Israel to settle down in Jerusalem, at least temporarily.
In the intervening years, Fischer built a career as a leading economist. As a professor at Massachusetts Institute of Technology, he wrote textbooks on macroeconomics. In the public sector he served as chief economist of the World Bank and later as deputy managing director of the International Monetary Fund. Fischer won praise in this capacity for helping the Mexican economy recover from its financial crisis. In between, he served as vice chairman of Citigroup; it was a lucrative banking position that has brought his personal wealth to between $14 and $56 million, according to his disclosure before his congressional confirmation hearing.