Must Bernie go on?

Posted

Friday, Jan. 1, 2010 

The chances are, when you're drawing fire from the likes of Vermont's Senator Bernie Sanders, as well as criticism from Republican Senator Jim Bunning of Kentucky, one of the most conservative and unpredictable members of the U.S. Senate (and the only one who ever threw a perfect game in Major League Baseball — which Bunning did while a member of the 1964 Philadelphia Phillies and is also his main claim to fame so far), that means you're probably doing your job — really well.

Ben Bernanke, the chairman of the Federal Reserve, the nation's central bank, is up for reappointment at the end of January, following the completion of an initial four-year term which began in February 2006. He followed one of the former legends of the Federal Reserve, Alan Greenspan, who retired after a 16-year run. When he stepped down, Greenspan was widely considered one of the true economic geniuses of our time, having shepherded the economy through the roller coaster ride of the late 1980s and on through the 1990s, ending up at a point when the economy seemed buoyant. As we know now, the seeds of the "Great Recession" had already been planted, and nowadays Greenspan's reputation is in tatters. He's derided as the man who should have been able to see the risks the titans of Wall Street were running with their exotic investment instruments that apparently few, if any of them understood. Greenspan failed to sound the alarm, or worse, do something about it. Neither did Bernanke. Few did.

Now Vermont's populist Senator has taken aim at Bernanke for the same reasons, placing a "hold" on his renomination. President Obama announced he wanted Bernanke back at the helm of the Fed last August, and there is every reason he should be. The Senate should act on the renomination as soon as possible; one, to alleviate any uncertainty in the financial markets about that outcome, and two, because Bernanke well deserves the reappointment. Why he would want it, during a period of economic frustration such as this is another question, but we're glad he does.

The last 18 months or so, since the fall of the investment firm Bear Stearns, have been deeply unpleasant for many people. Everyone knows somebody who has lost a job, a home or a business. Those that haven't lost one of those three things, have struggled. Aspirations and acquisitions have been put on hold and expenditures closely watched. Things seem to be slowly turning around, but it will be a while before they get back to "normal," with the economy humming along at a nifty, steady growth rate and unemployment back down into the low single digits.

Had Bernanke, a student of the Great Depression, not been in place as the Fed's Chairman, there is every reason to think things could have been far, far worse. Bad as it's been, the economy was poised to fall completely off the cliff back in September-October 2008. And then 10 percent unemployment, or 17 percent — depending on how you want to look at it — would have seemed like the sunny uplands of life, as we would have blown right through the 25 percent unemployment rate last seen in the 1930s. And that's the real hard-core 25 percent unemployment rate, where there are no jobs, period, for the people who want them. Nor would there have been the stimulus funds to help states like Vermont balance their budgets, because the federal government wouldn't have been able to borrow the funds from overseas bankers without paying punitively high interest rates. Down the tubes we really would have gone.

We're assuming Sanders simply wants to take advantage of one the Senate's arcane and often abused rules to prompt a debate on Bernanke's last four years. "Holds" of this sort are, according to the Senate's Web site, an informal practice by which a Senator informs his or her floor leader that he or she does not wish a particular bill or other measure to reach the Senate floor for consideration. The Majority Leader need not follow the Senator's wishes, but is on notice that the opposing Senator may filibuster any motion to proceed to consider the measure. The practice has often been used to delay the appointments of key officials to important government jobs, and hampers the smooth functioning of the government.

If, on the other hand, Sanders is really serious about forging a coalition to thwart Bernanke's reappointment, that would be vastly more harmful than the game in progress at the moment. Pushing this too far would be a mistake.

You can read Senator Sanders' take on this issue in the op-ed piece we've printed elsewhere on this page.

You can also pick up the recent issue of Time Magazine and read about how Bernanke was named that publication's "Person of the Year." Ben Bernanke doesn't walk on water, but he helped navigate the economy through its most perilous moment since the 1930s. He deserves the gratitude of Congress and the republic, not the brickbats our junior Senator is offering. He should be reappointed forthwith, and the Senate should get back to the other serious business it has before it.


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