Saturday, January 23, 2010

On Bernanke's Reconfirmation

by Bill McBride on 1/23/2010 08:49:00 AM

A few articles ...

From the WSJ: Populist Surge on Hill Eases the Support for Bernanke

Alarmed that there might not be the 60 votes in the Senate needed to extend Mr. Bernanke's term beyond its Jan. 31 expiration, the White House entered the fray publicly for the first time, with officials trying to win support among Democratic senators. President Barack Obama "has a great deal of confidence in what Chairman Bernanke did to bring our economy back from the brink," deputy White House press secretary Bill Burton told reporters aboard Air Force One. "And he continues to think that he's the best person for the job, and will be confirmed by the United States Senate."
From the NY Times: Bernanke’s Bid for a Second Term at the Fed Hits Resistance
Two Democratic senators who are up for re-election this year announced that they would oppose Mr. Bernanke, whose four-year term as head of the central bank expires at the end of this month. Their decisions reflected a surge of opposition among some Democrats and Republicans to Mr. Bernanke, a primary architect of the bailout of the financial system and a contributor to policies that critics contend put the economy at risk in the first place.
From the Financial Times: Bernanke under pressure

From CNBC: Bernanke Vote: 'Unthinkable Has Become a Possibility'

Bernanke definitely supported policies that contributed to the crisis, and he failed to see the problems coming. However once Bernanke started to understand the problem, he was very effective at providing liquidity for the markets.

But since his renomination, he hasn't done himself any favors. He has admitted the Fed failed as a regulator, but he hasn't explained why - or outlined a clear path forward. And Bernanke keeps saying really dumb things, like claiming incorrectly to have an exploding adjustable rate mortgage. That was an ignorant remark considering his position as Fed Chairman and the plight of so many Americans. And quoting a bank robber in testimony to Congress when addressing the long term deficit (suggesting Congress steal from middle class Americans?), and this right after he claimed he wouldn't comment on areas outside of the Fed's authority. Dumb.

I definitely think we could do better.