What does Bernanke’s Re-election mean for the Fed?
In a record Senate vote on Thursday, Federal Reserve Chairman Ben Bernanke was confirmed for a second term, which will be four years in length. Though votes for the post tend to be close following severe recessions, Bernanke’s was by far the closest at 70-30. President George W. Bush first appointed Bernanke to this post and, eventually, President Barack Obama re-nominated him.
It’s unsurprising then that the Chairman has seen a fair amount of support from both of the major political parties. Each of the Senate party leaders, for example, voted in confirmation of the incumbent. Still though, the Senate meeting and public opinion over the matter has been indicative of some larger political attitudes currently taking hold of the country.
Conservatives have been more critical of Bernanke. Many feel he should’ve had the insight to stop not only the massive bust from happening, but to also renounce the practices that led to said bust. Furthermore, his critics are frustrated at how he handled the aftermath of the situation. His response has included the expensive bailouts of several corporate behemoths such as the insurance company American International Group, Inc., who were rescued to the tune of $182 billion and additional bonuses to its executives and partners on Wall Street. Just as the surprising election of Republican Scott Brown to the Massachusetts Senate was viewed as a message from the people to the government and Obama regarding the healthcare fiasco, voting against a second-term for Bernanke was seen as a way for public officials to stand up and tell the people they support “Main Street” and not “Wall Street.” In fact, a large portion of the select 30 who voted against him will be facing re-election this November.
Nearly everyone supporting him rallies behind the reasoning that it’d be a mess to transfer power in such uncertain times. They say it would only lead to confusion and unrest. Yet, again, his critics are viewing this as another example of the short-term thinking that has contributed to the dismal current economy, 10% unemployment rate, and record number of home foreclosures. Even when conceding to the fact that Bernanke helped dispel panic just as it started taking hold, opponents have a hard time nonetheless supporting such shaky reasoning. The common opinion here seems to be that a slight hiccup in control would be nothing compared to the potential aftermath of four more years of the easy forgiveness, excessive money printing, and lax regulations Bernanke’s Federal Reserve has become associated with.
Of course, there’s always a counter-argument, and here the Dems (and a few Republicans) say the Fed is really only doing its job. The independent agency was designed to promote economic stability by serving as a backbone of sorts to all of the nation’s money-lending institutions. It’s meant to be the place to go when banks can’t get money from anywhere else.
Despite this, Bernanke’s upcoming term will likely be filled with audits, hearings, and changes as both branches of Congress have pending bills directly regarding the Fed and financial regulations. Each aspires to reduce the agency’s involvement in consumer affairs and, overall, prevent yet another financial crisis.
