The New York Times and Fox Business are now reporting that Ben Bernanke is likely to be reconfirmed as Federal Reserve Chairman later this week. Chris Dodd and Judd Gregg issued a joint statement on Saturday declaring that there was sufficient votes to reconfirm the Chairman.
“Chairman Bernanke has done an excellent job responding to one of the most significant financial crises our country has ever encountered,” they said. “We support his nomination because he is the right leader to guide the Federal Reserve in this recovering economy.”
Not surprisingly, neither Senator is up for re-election next year as both are retiring. In other words, they have nothing to lose by maintaining the status quo. The public, on the other hand, has loudly voiced their opposition to Bernanke, who has furthered the problems of too big to fail, the dollar crisis and the Federal fiscal issues.
Most pundits, economists and supporters of Bernanke appear to be frightful of the market response should Bernanke not be reconfirmed. Well, of course the market will respond negatively, as the friendliest big bank Central Banker of all time will be ousted. On the other hand, the markets are not the real economy, as we’ve clearly learned over the last 9 months. The public did not want to bailout the banks last Fall, but the fear generated by the markets suckered Congress into passing the trillions in bailouts. I fear the same thing is occurring now. In terms of a replacement – there are plenty of fine options. That argument doesn’t carry an ounce of weight.
Obama needs to make this economic recovery his own as opposed to crashing and burning on the failed ideas of his economic advisers. It is not too late in his term to make sweeping changes when it’s clear that the current path is failing. I fear he is making another catastrophic mistake by supporting Bernanke, the biggest big banker of them all. These decisions will not be forgotten the next time the electorate enters the voting booth. For Obama, it looks like he is going “all in” with the man who failed to forecast the downturn, responded too late, provided nothing for Main Street and saved the banking system that brought this crisis upon us.