THE BASIS POINT

Bernanke’s Re-Confirmation Hearing December 3

Fed chairman Ben Bernanke will be up for Congressional re-confirmation on December 3. Below is what Chris Dodd, chairman of the Senate Banking Committee had to say about it in August, and also what other Senators are saying on both sides of the aisle. The problem with politicians is that they’re subject to election cycles that are much shorter than market cycles, so they go for soundbytes most likely to resonate with voters rather than looking at economic and monetary policy issues in the proper market context and timing. Changing Fed chair seats as quickly as congressional seats is a mistake.

DODD ON BERNANKE RE-APPOINTMENT

Senate Banking Committee Chairman Chris Dodd (D-CT) issued the following statement on the news that Ben Bernanke will be reappointed as Chairman of the Federal Reserve.

“While I have had serious differences with the Federal Reserve over the past few years, I think reappointing Chairman Bernanke is probably the right choice,” Dodd said. “Chairman Bernanke was too slow to act during the early stages of the foreclosure crisis, but he ultimately demonstrated effective leadership and his reappointment sends the right signal to the markets.”

“There will be a thorough and comprehensive confirmation hearing. I still have serious concerns about the Federal Reserve’s failure to protect consumers and I strongly believe these responsibilities should go to an independent consumer financial protection agency. I expect many serious questions will be raised about the role of the Federal Reserve moving forward and what authorities it should and should not have.”

OTHER LAWMAKERS ON BERNANKE RE-APPOINTMENT
(excerpted from TheHill.com)

“I don’t know where that sits,” [Sen. Bob] Corker (R-Tenn) told reporters when asked if Bernanke would have the votes to get a second term, adding he wasn’t sure whether Bernanke would have the votes in the 23-member Senate Banking Committee, either. Corker noted that he leans toward supporting a second term for the Fed chairman, who was nominated in August to a second term by President Barack Obama, but acknowledged gripes toward the Fed chairman on the left and the right.

Sen. Richard Shelby (R-Ala.), the top Republican on the Banking committee, would not say how he would vote on Bernanke’s nomination, only encouraging reporters to stay tuned for the chairman’s hearing this week. “I used to be a big defender of the Fed,” he said, adding he believes the institution has “utterly failed” in its role for regulating financial institutions.

“I think it makes no sense to reappoint somebody who’s an integral part of the problem,” Sen. Bernie Sanders (I-Vt.) said during an appearance on the liberal Bill Press Radio Show podcast earlier today. “I certainly will not be voting to reappoint Ben Bernanke.”