I don't see eye to eye with Bernanke's monetary policy and don't believe that a total scholarly approach is the best.
With that being said he was re-affirmed today.
Love how they cite shaky markets or overall investor nervousness as a reason to let him have another 4-year term. What a freaking joke. Financial regulation will not happen, Banks and others will get around whatever proposed rules become established. Bank on it (no pun intended).
With that being said he was re-affirmed today.
Love how they cite shaky markets or overall investor nervousness as a reason to let him have another 4-year term. What a freaking joke. Financial regulation will not happen, Banks and others will get around whatever proposed rules become established. Bank on it (no pun intended).
Senate Reappoints Bernanke
By SUDEEP REDDY[h3] [/h3]
The Senate voted to reappoint Ben Bernanke for a second four-year term as chairman of the Federal Reserve.
Earlier, senators voted 77-23 to end debate, clearing the way for afinal vote. During more than two hours of debate on the Senate floor,Bernanke backers warned that voting him down risked sparking turmoil inU.S. and foreign markets and thwarting a budding economic recovery.They said the Fed chairman deserved an opportunity to finish what hestarted.
"To vote against confirmation could unnerve investors and exacerbateeconomic uncertainty in the marketplace, which is exactly what we donot need at this time," said Sen. Robert Menendez, Democrat of NewJersey. "We need the wisdom of patience," he said. "Let us not judgethe man or the work prematurely."
Critics assailed him for his record ahead of the crisis, from banksupervision to mortgage regulation to the financial rescue. "Bernankefiddled while our markets burned," said Republican Sen. Richard Shelbyof Alabama, the senior Republican on the Senate Banking Committee. "Ibelieve that it is the duty of this body to hold accountable thoseregulators whose poor oversight of our financial institutions andmarkets helped produce the greatest economic crisis this country hasexperienced in eighty years."
Republican Sen. Jim Bunning, one of Mr. Bernanke's fiercest critics,said "a vote for Ben Bernanke is a vote for bailouts," and added, "Ifyou want to put an end to bailouts and send a message to Wall Street,this vote is your chance," he said.
Mr. Bernanke was nominated for another term as Fed chairman byPresident Barack Obama last year. He came to Washington from PrincetonUniversity in 2002 to serve as member of the Fed's Board of Governorsunder the chairmanship of Alan Greenspan, left the Fed briefly to serveas chairman of President George W. Bush's Council of Economic Advisersand succeeded Mr. Greenspan in 2006. As Fed chairman, he presided overthe response to what he has termed the worst financial crisis in modernhistory.
"Had it not been for Ben Bernanke in the chair of the FederalReserve, I believe we'd be looking at a very different America today.,"Sen. Chris Dodd, the Connecticut Democrat who chairs the Senate BankingCommittee, said on Senate floor.
While lawmakers considered the nomination in recent weeks, Mr.Bernanke has worked not just to secure his own future but to protect aninstitution that's under attack. Several senior Democratic andRepublican senators want to fundamentally revamp the Fed's structure,stripping its role as a bank supervisor. The debate over Mr. Bernanke'snomination highlighted criticism of the central bank's track record,its transparency and its controversial response to the crisis. "There'sa lot of unrest in the country and a lot of people do not believe thatthe Fed should've been the central intervener" in troubled financialfirms, Sen. Shelby said.
The Bernanke debate "puts economic policy squarely in people'sminds," said Sen. Jeff Merkley, Democrat of Oregon, who voted againstthe nomination. "Many of us feel that policy that's been dictated byshort-term desires of Wall Street that have not served our nation wellhave to be looked at."
The reluctance of many senators to support Mr. Bernanke suggestsmore lawmakers could step up to support other popular provisions thatthe Fed opposes, such as auditing the central bank's monetary policy orscaling back its authorities. "With the Fed having such a dramaticallyincreased role in the economy of the country, there are going to befurther demands for greater transparency," said Sen. John McCain, anArizona Republican.
No Fed chairman nominee has been rejected by the Senate. PaulVolcker was confirmed for a second term in 1983 by a vote of 84-16, thesmallest margin ever. Bernanke may face even higher opposition in thefinal vote.
Mr. Bernanke is a controversial figure. He was the main personbehind the successful fight, in 2007 and 2008, against what he hasdescribed as possibly the worst financial crisis in modern history.
An expert of the 1930s Great Depression, supporters say Bernankeavoided a similar fate for the U.S. economy with his bold decisions toslash interest rates to near zero, flood the financial system with morethan $1 trillion, and rescue big financial firms such as AmericanInternational Group Inc.
"Ben Bernanke helped avert a global financial crisis. I believehistory will prove that is the truth," said Kent Conrad (D., ND). Oncehistory is written, "Bernanke will prove to be one of the heroes of thepiece."
Critics, however, say he helped fuel the housing bubble at the rootof the financial crisis by endorsing low interest rates in the early2000s, when he was Fed governor and Alan Greenspan headed the centralbank.
Bernanke's been at the center of the most controversial moves in thecrisis: deciding which firms to save and which to let fail. Each ofthose steps, from rescuing American Internation Group Inc. to allowingLehman Brothers Holdings Inc. to go down, is being scrutinized bylawmakers.
Critics have assailed the Fed for supporting AIG at taxpayers'expense. The insurer got about $180 billion from the federal governmentand AIG counterparties, including Goldman Sachs Group Inc. and SocieteGenerale SA, got $62 billion for tearing up insurance contracts withthe embattled insurer.
"The full story of AIG has yet to be told... What is clear, however,is that the Fed knew more about AIG's problems than it has admitted sofar," U.S. Senator Richard Shelby (R., Ala), ranking Republican on theSenate Banking Committee, said Thursday.
In a letter sent to Rep. Darrell Issa (R., Calif.) Wednesday, Mr.Bernanke said the health of AIG's major trading partners wasn't afactor in the government's negotiations. The Fed chairman said hesupported the Fed's decision but was not a party to the negotiations.
"I was not directly involved in the negotiations with thecounterparties," Mr. Bernanke wrote, noting that the counterpartypayments helped "remove an enormous obstacle to AIG's financialstability."
Mr. Bernanke's toughest challenge this year will be deciding when toraise interest rates as the economic recovery takes hold. If the Fedmoves too soon, it could kill a nascent recovery, hurting an alreadyweak labor market. Moving too late could fuel another asset bubble orbring the high inflation rates seen in the 1970s.
The Federal Reserve policy-making arm Wednesday gave a slightly moreupbeat reading of the U.S. economy, but left interest rates near zeroto help support what it considers a still soft recovery.
However, in the first sign of dissent in a year, Kansas City FedPresident Thomas Hoenig voted against the action, believing the economywas strong enough to remove a pledge to keep rates at a record low foran "extended period," which is seen as around six months. Someobservers read Hoenig's dissent as a sign the Fed may be inching closerto hiking rates.
—Luca DiLeo and Corey Boles contributed to this article.
