This weekend, the President should softpedal his support for Bernanke in such a way that any insider will recognize it as a withdrawal. It's perfect. If the Democrats had sought to replace Bernanke on their own, it would have ginned up accusations of irresponsibility. But with the GOP getting in line (McCain added his 'nay' vote today) this is an amazing opportunity. Obama will have the ability to appoint a new Fed Chairman. This is an enormous amount of power that may fall into his lap. And tagging it as Obama's defeat is not going to work, not when Bernanke was inherited. Greenspan's problem was that he as an Ayn Randist who never really understood that self-interest was an insufficient cushion against economic anarchy. Bernanke, being Greenspan's annointed, is not of a wholly different mode. We need a real institutionalist to be appointed to that spot. Someone who understands that sound financial regulation is not "red tape" but the sine qua non of a healthy financial system. This is not a good time for Barack Obama to support the unpopular Fed chairman, not when withdrawing his support could actually empower the Democratic agenda.
Monday, January 25, 2010
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4 comments:
I agree. This is a chance for Obama to get his "own guy" in the position.
I understand too that a number of Senators are ticked off that Bernanke refused to answer their questions about which banks got loans and under what terms.
Other than the question re banking loans through AIG that RBR mentions... What do you have against Bernanke? I thought Bernanke took the Fed to war against the financial crisis in 2007-08 in a way none of his predecessors even imagined. For a while, he was the only person doing *anything* to try to staunch the bleeding.
I can't speak for LTG but I think the refusal to tell Congress where public monies are being spent and under what conditions is outrageous. I understand the need for an independent central bank and all that. But in this case, the Fed was acting as the agent of Congress in distributing Congressionally appropriated funds to private companies. The Senators should have gotten an answer and rejecting his renomination is the only way they have punishing him.
Dr.S - I don't have anything against Bernanke, really. But why would Obama not want to appoint his own man? Wouldn't it be nice to appoint someone who is an avowed liberal?
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