Bernanke Wins Second Term But Not a Vote of Confidence
Ben Bernanke has been tapped to lead another term at the Fed.
Federal Reserve Chairman Ben Bernanke won a second term Thursday in what was the closest confirmation vote ever for the post.
The 70-30 vote in the Senate seemed like a solid majority, but indicated unusual opposition to Bernanke, whose critics charged that he bailed out Wall Street but left regular Americans to fend for themselves through a brutal recession. Supporters argued that he engineered policy to prevent the recession from turning into another Great Depression -- a view bolstered by his selection as last year's Time Person of the Year.
So who is the real Bernanke and did he deserve a second term?
- MIT professor and economist Simon Johnson called Bernanke's reappointment a "massive failure of governance." Writing on the Huffington Post, Johnson said "a Bernanke reappointment implies larger bailouts in the future - thus compromising our budget further with contingent liabilities, i.e., huge payments that we'll have to make next time there is a crisis. What kind of fiscal responsibility strategy is this?" He argued that the Senate blew a chance at "any serious attempt at reform."
- Marketnews.com's Steven K. Beckner asserts Bernanke was scapegoated during the market collapse and deserved a second term. "That the confirmation process was much more rigorous than usual should not be surprising. Not only did a severe financial crisis happen on his watch, he played a key policy role in the years preceding the crisis," he wrote. But "he clearly deserves credit for the innovative ways that he and his Fed colleagues responded to the crisis," he continued. "Without the Fed's aggressive response, in cooperation with the Treasury, the Federal Deposit Insurance Corporation, the White House and foreign central banks, arguably the crisis would have been much worse."
- The Atlantic's Megan McArdle doesn't give Bernanke's confirmation two thumbs up but argues that there was no other real alternative. "Bernanke's current policies would have to be much more terrible than they are to justify throwing him out of office without even a suitable replacement in mind," she wrote. "It would be one thing if Democrats (or Republicans, for that matter) had been carefully grooming a substitute with an excellent resume and a good shot at confirmation."
- “The opposition to Bernanke isn’t about the guy former Fed official Vincent Reinhart, a resident scholar at the American Enterprise Institute in Washington, told Bloomberg BusinessWeek. “It shows the public distrust of the institution.”