Issue of the week: Does Bernanke deserve a second term?

Federal Reserve Chairman Ben Bernanke testified before an often-hostile Senate Banking Committee to make the case for his reappointment to a second term.

Federal Reserve Chairman Ben Bernanke “has become a lightning rod for public anger that Wall Street got bailed out and Main Street didn’t,” said David Wessel in The Wall Street Journal. Bernanke’s four-year term expires Jan. 31, and last week, he testified before an often-hostile Senate Banking Committee, making the case for his reappointment to a second term. It wasn’t pretty. Legislators from both ends of the political spectrum took him to task for a host of perceived offenses, beginning with his decision to pay AIG’s trading partners in full when the giant insurer couldn’t make good on its financial bets. Accusing Bernanke of handing out “cheap money to your masters on Wall Street,” Republican Sen. Jim Bunning of Kentucky called the Fed chairman “the definition of moral hazard.” Even his chief supporter in the Senate, Connecticut Democrat Chris Dodd, came out in favor of stripping the Fed of its regulatory authority. After the grilling, practically the only question remaining for Bernanke is, “Why exactly do you want to go through this for another four years?”

More to the point, why would the American people want him to? asked Dean Baker in HuffingtonPost.com. “Bernanke bears much of the blame for this economic collapse.” Before taking charge of the Fed in 2006, he was a high-ranking official there, and “better positioned than any other person in the country to prevent this disaster.” Yet he failed to recognize the massive housing bubble that was building up, or to do anything to bring it under control. Worse, he then helped inflate the bubble by keeping interest rates too low for too long, said The Wall Street Journal in an editorial. We are now “in another period of extraordinary monetary ease,” and Bernanke is blithely assuring Congress that this time, he’ll know when to raise interest rates. Really?

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us