Bloomberg Article: "Bernanke Set to Defend Record as Reappointment Debate Begins"
Link to Complete Bloomberg Article - Excerpts Below
June 23 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke will defend his unprecedented actions to prevent a financial collapse as debate on whether he should be reappointed begins.
Bernanke, whose term expires Jan. 31, faces lawmakers at a hearing this week on steps to aid Bank of America Corp.’s takeover of Merrill Lynch & Co. as Congress increasingly questions the Fed’s interventions.
“The vultures are circling,” said David M. Jones, a former Fed economist who is president of DMJ Advisors LLC in Denver. Bernanke is “going to be on the defensive,” even after “turning confidence around” since the depths of the crisis, he predicted.
Odds favor the former Princeton University economist, a Republican: Reappointment may be less disruptive to investors, and no first-term president has replaced a sitting chairman in 30 years. Many on Wall Street and in Washington view it as likely Bernanke will be reappointed.
Traders on online exchange Intrade place 65 percent odds on Bernanke’s renomination.
Still, any Obama decision may be half a year away, and the economy and financial markets could shift again. The jobless rate is still rising, and economists anticipate it will reach a quarter-century high of 10 percent at year-end. The Fed is mandated by Congress to achieve maximum employment as well as stable prices.
House Financial Services Committee Chairman Barney Frank said he’s “very pleased” with Bernanke.
AMD.com Commentary and Political Analysis
It is only a rule of thumb, but if Barney Frank is “very pleased” by your intervention in the economy you are unfit to serve as Chairman of the Federal Reserve.
Based on the Fed's mandate to achieve maximum employment and stable prices, Bernanke's tenure has been disastrous and the Federal Reserve has failed consistently and repeatedly since its inception in 1913.
Political predictions are difficult; especially when they are appointments. But given Obama’s enthusiasm for Government Activism and the inevitability of the economy’s erosion over the next 6 months, my guess is that Bernanke will be a sacrificial lamb for the Administration in 2010.
I don’t think that Obama is or will be displeased with Bernanke’s policies. It simply appears that the President is interested in putting his thumbprint on as much of the U.S. Government as he can, and nominating his own Fed Chairman would be in keeping with this observation. Also, 2010 will be an election year and to the extent the Administration can attempt to deflect responsibility from the economy, they will. It is likely that at some point either Obama, the media or self-serving members of Congress will remember that Bernanke was a Bush appointment and as such makes a politically expedient pin-cushion to a portion of the electorate.
June 23 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke will defend his unprecedented actions to prevent a financial collapse as debate on whether he should be reappointed begins.
Bernanke, whose term expires Jan. 31, faces lawmakers at a hearing this week on steps to aid Bank of America Corp.’s takeover of Merrill Lynch & Co. as Congress increasingly questions the Fed’s interventions.
“The vultures are circling,” said David M. Jones, a former Fed economist who is president of DMJ Advisors LLC in Denver. Bernanke is “going to be on the defensive,” even after “turning confidence around” since the depths of the crisis, he predicted.
Odds favor the former Princeton University economist, a Republican: Reappointment may be less disruptive to investors, and no first-term president has replaced a sitting chairman in 30 years. Many on Wall Street and in Washington view it as likely Bernanke will be reappointed.
Traders on online exchange Intrade place 65 percent odds on Bernanke’s renomination.
Still, any Obama decision may be half a year away, and the economy and financial markets could shift again. The jobless rate is still rising, and economists anticipate it will reach a quarter-century high of 10 percent at year-end. The Fed is mandated by Congress to achieve maximum employment as well as stable prices.
House Financial Services Committee Chairman Barney Frank said he’s “very pleased” with Bernanke.
AMD.com Commentary and Political Analysis
It is only a rule of thumb, but if Barney Frank is “very pleased” by your intervention in the economy you are unfit to serve as Chairman of the Federal Reserve.
Based on the Fed's mandate to achieve maximum employment and stable prices, Bernanke's tenure has been disastrous and the Federal Reserve has failed consistently and repeatedly since its inception in 1913.
Political predictions are difficult; especially when they are appointments. But given Obama’s enthusiasm for Government Activism and the inevitability of the economy’s erosion over the next 6 months, my guess is that Bernanke will be a sacrificial lamb for the Administration in 2010.
I don’t think that Obama is or will be displeased with Bernanke’s policies. It simply appears that the President is interested in putting his thumbprint on as much of the U.S. Government as he can, and nominating his own Fed Chairman would be in keeping with this observation. Also, 2010 will be an election year and to the extent the Administration can attempt to deflect responsibility from the economy, they will. It is likely that at some point either Obama, the media or self-serving members of Congress will remember that Bernanke was a Bush appointment and as such makes a politically expedient pin-cushion to a portion of the electorate.
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