When Alan Greenspan retired and handed over the reins of the Federal Reserve to Benjamin Bernanke, many wondered if Bernanke could step up to the plate and successfully manage the Federal Reserve in the way that Alan Greenspan had in his 19 years of service. Now that Benjamin Bernanke’s first four year term as Chairman of the Board of Governors of the Federal Reserve System is coming to a close, many are wondering whether or not he will be re-appointed for a second term.
The Federal Reserve’s recent annual retreat at Jackson Lake Lodge in the Grand Tetons provides some valuable insight into the general mood at the Federal Reserve about Bernanke’s chairmanship. According to the Wall Street Journal, a renewal of Bernanke’s chairmanship was not discussed at the meetings, but many of the Federal Reserve board members and economists that were present for the meeting indicated that they were happy with the job that Bernanke was doing and would support a second Bernanke term.
Another WSJ study found that Bernanke has wide-spread support among economist. In the survey that they conducted, 42 out of 43 economists that were surveyed state that he should be re-appointed for a second term.
However, a second Bernanke term isn’t a sure thing. Bernanke faces significant criticism from Congress and from Libertarian-leaning individuals. He has also been criticized by some economist for flooding the financial system with too much money. The critics believe that the large amount of money that the Federal Reserve released into the US economy will cause a significant amount of inflation down the line. Others criticize Bernanke for working too closely with the Treasury department and jeopardizing the fed’s independence.
Perhaps the best argument for a second Bernanke term was summed up by John making, a money-manager for Caxton Associates. In that same WSJ article, he stated, “I can’t imagine that the president wouldn’t reappoint Ben. Why would you start with somebody new who is unproven?”
