Saying the Ben Bernanke is “part of the problem,” Senator Bernie Sanders said on Sunday that he will definitely vote against nominating Bernanke for a second term as Chairman of the Federal Reserve.
The Federal Reserve, which has long wanted to keep their activities and persona quiet, are no longer able to operate under those conditions, as the increased scrutiny, not only for the slow response to the current economic crisis, but precipitating them throughout the many decades of its existence, has lawmakers and the public wanting to put a magnifying glass on the institution to find out what it has been up to.
Ben Bernanke and the Federal Reserve are of course fighting this impulse, and Bernanke is fighting for his political life in attempting to spin his action and the Federal Reserve as saviors of the economy, rather than a major part of the reason we’re where we’re at.
Bernanke basically made the tired old argument of his that the Federal Reserve must keep its independence and not be construed as being influenced by Congress, even though very few people other than Ben Bernanke and a few of his friends even care about that as part of the national dialogue concerning the ongoing role and viability of the Federal Reserve.
Not only has the monetary policies of the Federal Reserve come under question, but there are serious questions as to where Bernanke took the Fed in offering bailouts at an unprecedented rate to industries like insurance and automakers, which were very dubious as to having should or needing to be done, let alone bailouts of the gigantic banks, which should have been allowed to fail.
On the ABC television program “This Week,” Sanders stated as a consequence of Bernanke not doing “anything to prevent us from sinking into this disaster that Wall Street caused and which he was a part of,” he “absolutely will not vote for Mr. Bernanke. He is part of the problem.”
On Thursday the Senate Banking Committee will hold a hearing to listen to the testimony of Bernanke concerning his nomination for a second four-year term as Chairman of the Federal Reserve. It promises to be a heated, interesting and difficult discussion for Bernanke.
I’m somewhat torn between which way I want this to go, because if Bernanke was rejected as the nominee, it would look like the problem was one of strategy and execution by him, rather than the systemic disease the Federal Reserve itself is. If he’s renominated, he’ll continue on with business as usual once the smoke clears, and nothing will really change; at least not in the short term.
The one great consequence of the crisis of the Federal Reserve is it will never be able to operate under the secret conditions it has in the past. They’re now in the sights of many people that didn’t understand what it was doing before, and so every move will be watched and analyzed at minimum, and if Ron Paul’s legislation is finally passed which would require a thorough audit of the Federal Reserve on an ongoing basis, it would give everyone a needed look at its inner workings, while generating checks and balances it hasn’t had to deal with ever.
