An American Lion

Ben Bernanke

I don’t blame people for being mad at Ben Bernanke. Shouldn’t they be just as mad, if not madder, at Tim Geithner and his decision to hand out billions? Perhaps not.

Federal Reserve Chairman Ben S. Bernanke may be heavily favored to win Senate confirmation for a second term, but he faces a far tougher challenge in trying to beat back efforts by angry lawmakers to curb the Fed’s independence as an arbiter of economic policy.

The anger, which is likely to boil up today at Bernanke’s confirmation hearing, arises from the Fed’s widely acknowledged failure to curb the excessive risk-taking and other financial behavior that helped precipitate the worst economic crisis since the Great Depression.

Reflecting the antagonism Bernanke faces in Congress, Sen. Bernie Sanders of Vermont placed a hold on the Fed chief’s nomination late Wednesday.

The move by Sanders, an independent who caucuses with the Senate’s Democrats, isn’t expected to derail Bernanke’s confirmation.

Posing more of a threat is an increasingly powerful effort to subject the Fed to congressional audits and other supervision. That campaign has raised concern among economists and some policymakers that global confidence could be shaken if foreign investors fear the U.S. central bank will be subject to the shifting winds of domestic politics.

The policies that built up a massive bubble weren’t enacted by Ben Bernanke—he inherited them from that vaunted genius, Alan Greenspan. As a matter of fact, we’re talking about laws enacted by the Congress and signed into law by that noted free market and economic genius, Bill Clinton. It’s all well and good for the likes of Senator Chris Dodd to call the Fed an abysmal failure, but where was the oversight from previous iterations of Congress? Where were the hearings that were supposed to have discovered we were headed for a meltdown?

Where is the acknowledgement that this is what President Obama himself has had to say about Bernanke’s tenure:

“Ben approached a financial system on the verge of collapse with calm and wisdom, with bold action and out-of-the-box thinking that has helped put the brakes on our economic free fall,” Mr. Obama said, with the Fed chairman standing at his side. His “bold, persistent experimentation has brought our economy back from the brink.”

Was that President Obama’s ringing endorsement or his first “heckuva job, Brownie” of the year? If the Congress is unhappy with the Fed, then come up with a plan the Fed can carry out to make things work. It all begins with the work of the Congress, not the Fed.

Oh, and the good numbers we’re seeing as of late aren’t to do with Wall Street’s confidence in interest rates and Bernanke, are they? Of course not. We need another Bush-era scapegoat so that the Obama appointees can continue to duck responsibility for the most irresponsible monetary policy since throwing money from the rooftops was in vogue. I am ambivalent on Bernanke. There’s no question that he failed to stave off the crisis that happened on his watch, but, in his defense, Senator Gramm’s bill certainly defanged the oversight and left the Fed and the SEC on the sidelines. Should Bernanke be confirmed? I don’t know what his firing offense would be. He is not a guy who has done anything that should have finished his career. I suppose that’s a tepid endorsement, but who else are you going to get?