Sunday, January 24, 2010

Hey Barack!--Bernanke is Part of the Problem, Not the Solution


The very fact that Obama actually nominated Bernanke for a second term-- a Republican who was chosen to run the Federal Reserve by the Bushwhacker himself-- and under whose watch the national economy was plunged into the greatest economic breakdown since the Great Depression-- speaks volumes about how deeply compromised and hopelessly conservative Obama really is in dealing with the rampaging economic elites in the financial and corporate sectors and on Wall Street. Bernanke should have been fiercely opposed by Obama from day one of his Presidency but just like in the egregious cases of the rest of Barack's "Republican-lite" economic policy team of Timothy Geithner and Larry Summers (incompetent Wall Street lackeys who should be fired) Obama has shown once again just how foolishly enarmored of and politically frightened by the super wealthy assholes and corrupt whitecollar criminals who run this country he really is. Bernancke is a national disgrace, he always was and the sooner Democrats in Congress can get rid of him the better no matter what Obama says to the contrary...


January 23, 2010

Opposition Grows Against Second Term for Bernanke


The confirmation of Ben S. Bernanke to a second four-year term as chairman of the Federal Reserve ran into further trouble on Friday as two more Democratic senators said they would vote against him.

The White House came to Mr. Bernanke’s defense, but the Senate majority leader, Harry Reid, appeared uncertain about whether there were the 60 votes necessary to confirm Mr. Bernanke before his term as chairman expires on Jan. 31. Mr. Reid said late Friday that while he planned to vote for Mr. Bernanke’s confirmation, his support was “not unconditional.”

Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the Banking Committee, warned Friday that a no vote would send the “worst signal to the market right now,” and could lead to an economic “tailspin.”

In a statement Friday morning, Senator Barbara Boxer, Democrat of California, came out against Mr. Bernanke, who was named to his post during the Bush administration. She said she had “a lot of respect” for him and praised him for preventing the economic crisis from getting even worse. “However, it is time for a change,” she said. “It is time for Main Street to have a champion at the Fed.”

“Our next Federal Reserve chairman must represent a clean break from the failed policies of the past,” Ms. Boxer said.

Another Democratic senator, Russell D. Feingold of Wisconsin, also announced Friday that he would vote against Mr. Bernanke.

“Under the watch of Ben Bernanke, the Federal Reserve permitted grossly irresponsible financial activities that led to the worst financial crisis since the Great Depression,” Mr. Feingold said in a statement.

Senate Democratic leaders had contemplated trying to hold a vote this week on Mr. Bernanke’s nomination to a second term, but they were forced to hold off after several senators unexpectedly voiced opposition to his confirmation at the party’s weekly luncheon on Wednesday. Democratic leaders asked for a show of hands and, though aides would not provide a precise count, Mr. Reid was said to be surprised at the number.

Senators Bernard Sanders, independent of Vermont, and Jeff Merkley, Democrat of Oregon, are leading the opposition to Mr. Bernanke within the Democratic caucus. “As chairman, Dr. Bernanke failed to recognize or remedy the factors that paved the road to this dark and difficult recession,” Mr. Merkley said last month.

Allan H. Meltzer, a professor at Carnegie Mellon University and an expert on the Fed, said that the Senate had never voted to outright reject a nominee for Fed chairman and that he knew of no instance in which the president had withdrawn the nomination of a Fed chairman after it was clear that the Senate would not confirm.

Senators’ stances on Mr. Bernanke have not fallen along the usual partisan lines. Last year, President Obama nominated Mr. Bernanke, a Republican who was named the 14th chairman of the Fed by President George W. Bush in 2006, to a second term. In December, the Senate Banking Committee voted 16-7 to support Mr. Bernanke for another four years. Only 4 of the 10 Republicans on the panel supported him: Senators Robert Bennett of Utah, Bob Corker of Tennessee, Judd Gregg of New Hampshire and Mike Johanns of Nebraska.

The Senate Republican leader, Mitch McConnell, has not indicated how he will vote. Senator Olympia J. Snowe, Republican of Maine, said Thursday that she was leaning toward voting for Mr. Bernanke but had not made up her mind.

Several liberal Senate Democrats have said they remain undecided as well. And in a sign of the uncertainty on the Democratic side, Mr. Reid has asked Mr. McConnell to count the votes on the Republican side.

To some degree, Mr. Bernanke is caught up in the same kind of populist anger that defined the Massachusetts Senate race, in which the Republican candidate, Scott Brown, pulled off a remarkable upset on Tuesday by beating his Democratic opponent to take the seat long held by Edward M. Kennedy.

Mr. Feingold, who announced his opposition on Friday, is among the most liberal senators, and Ms. Boxer faces re-election this year, a tough mid-term cycle for Democrats.

But opposition to Mr. Bernanke has emerged from both the left and the right, as anger has mounted over the Fed’s extraordinary interventions in the market in 2008 — which have been lumped together with the huge bailouts of big financial institutions — and over the perceived regulatory failings of the Fed in the years preceding the crisis.

Some economists also believe that the Fed’s policy of low interest rates in the early part of the last decade laid the groundwork for the housing bubble; Mr. Bernanke was a member of the Fed’s board of governors for part of that period, when Alan Greenspan was chairman.

On Friday morning, a White House spokesman, Bill Burton, said President Obama “has a great deal of confidence in what Chairman Bernanke did to bring our economy back from the brink” and “continues to think he is the best person for the job and will be confirmed by the United States Senate.”

Mr. Reid said that he had met with Mr. Bernanke on Thursday and had received assurance that the Fed would soon outline plans for helping consumers get “access the credit they need to buy or keep their home, send their children to college or start a small business. The Fed chairman, Mr. Reid said, also deserves some credit for taking steps to avoid a depression.

Four senators have placed holds on Mr. Bernanke’s nomination: three Republicans, Jim Bunning of Kentucky, Jim DeMint of South Carolina and David Vitter of Louisiana, and an independent, Bernie Sanders of Vermont, who describes himself as a socialist and who caucuses with the Democrats.

Other Democratic senators who are strong supporters of Mr. Obama have so far withheld their support. Senator Claire McCaskill of Missouri said Thursday that she was undecided. Senator Sheldon Whitehouse of Rhode Island said he was “not leaning favorably,” the Capitol Hill newspaper Roll Call reported.

Mr. Bernanke, a renowned Princeton economist and an expert on the Great Depression, is also seen as having not sufficiently answered questions from members of both parties during his confirmation hearings last year.

Richard C. Shelby of Alabama, the top Republican on the Senate Banking Committee, criticized Mr. Bernanke on Thursday, saying he was part of the problem of banks considered “too big to fail.”

Mr. Shelby told CNBC that he had supported the Fed in the past, “but as a regulatory body, I believe they failed the American people.”

He added, “I asked Chairman Bernanke how much time his board of governors spent on regulatory affairs: Was it 1 percent, 2 percent, 10 percent? And he never gave us even an answer. It was 1 percent. So I’m not going to support the Fed chairman.”

If Mr. Bernanke is not confirmed, his term as chairman will expire on Jan. 31. However, he would remain a member of the board of governors, as he holds a separate 14-year appointment that does not expire until 2020.

The Federal Open Market Committee — the panel that votes on the Fed’s crucial interest rate — is to hold the first of its eight meetings this year next Tuesday and Wednesday, a few days before Mr. Bernanke’s term is to expire. At that meeting, as is the custom, Mr. Bernanke is to be elected chairman of the committee, by virtue of his position as chairman of the board of governors.

The next meeting to set monetary policy is scheduled for March.

David M. Herszenhorn contributed reporting.

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