Jay Cost of Real Clear Politics tweets that the Senate just voted for cloture on Ben Bernanke's confirmation, 77-23. Immediately thereafter came the tweet from Jim DeMint: "By confirming Bernanke, the Senate rubber-stamped a failed economic policy." Perhaps, but what was the alternative? Throwing markets into turmoil as we toss Bernanke aside and start over? What sort of qualified candidates does Senator DeMint think we'll get, after he's punished one of the world's greatest experts on financial crises for, well, being in office when one happened? More frightening to contemplate: what sort of candidate would have been confirmable if Bernanke's nomination had failed? It's getting harder and harder to get people into office, especially in finance, where any nominee who knows anything is too apt to have ties to the banking industry, or have employed a nanny without paying social security taxes, or have some other disqualifying flaw that doesn't actually have much bearing on their ability to do the job.
Bernanke's current policies would have to be much more terrible than they are to justify throwing him out of office without even a suitable replacement in mind. It would be one thing if Democrats (or Republicans, for that matter) had been carefully grooming a substitute with an excellent resume and a good shot at confirmation. But the "no" votes are, in my perhaps cynical view, more about what happened in Massachusetts last week than about any coherent policy agenda. That's not a good way to make decisions, and the likely outcome would have been greatly inferior to whatever you think is going to happen in a second Bernanke term.
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Is it really that hard to find qualified people to work in government who have also paid their taxes?
Humm, as I'm sitting here in SC right now, I'm really pondering the ineffable, koan like, pensive confusion of encountering the terms Senator DeMint and think in the same sentence.
There were no alternatives that were better that would have occurred, and some that could have happened and would be downright dangerous. The devil I know is better this time.
Votes like this one (or the vote on TARP last year) give me confidence that Fallows' well-expressed fears about America's decline are nevertheless misplaced. When something is important enough, Congress seems to be able to get it right. They seem to understand that you don't play around with the financial system; they got a whiff of Armageddon last fall and I think they've figured out that we don't want to go anywhere near it again.
A few hours previous to this vote, the Senate increased the US debt ceiling another $1.9 trillion. Speaking of playing around with the financial system. I saw the term 'burn rate' used. Almost forgot that travesty.
I'd withhold judgement of Bernanke for a few more years. What happens in 2010 will be the tell. Much of what he did was kick the can down the road.
Derek
Another good example of Congress' ability to act responsibly when necessary. Voting not to increase the debt ceiling would have been irresponsible.
This isn't about Bernanke. He is unquestionably qualified, but there are probably dozens, maybe even hundreds, of people who would also be qualified. And you can justifiably criticize some of his actions at the Fed, both in continuing Greenspan's policies that allowed the real estate bubble to get out of hand and in failing to exercise regulatory oversight. Nevertheless, the overriding principle is the need to keep politics out of the Fed. That's why it's important that he be re-confirmed.
Hundreds of qualified Fed chairmen? I sometimes have difficulty believing that there's even one.
Have you seen the chart of spending ? Pretty close to asymptotic.
http://reason.com/assets/mc/jtaylor/verospendingchart.jpg
Nevertheless, the overriding principle is the need to keep politics out of the Fed. That's why it's important that he be re-confirmed.
Are you that naive? Your answer is very weak tea.
Mike - That's a linear curve of absolute dollars. Yes, it's asymptotic. Plot it on a logarithmic scale, and measure it in real dollars per capita if you want useful data. It'll still be scary, but it'll be scary in a way that isn't instantly obvious.
I have to assume that this was a backhanded reference to your earlier post about Timothy Geitner. As I recall you kind of missed that people weren’t upset so much about the fact he had a nanny whose immigration status changed while she worked for him and were more upset about the fact that the guy in charge of the Treasury Department which includes the IRS, basically got away with cheating on his own taxes until he faced a Senate confirmation hearing.
As far as Bernake goes, I have no opinion as to whether he should get another term but the fact that Obama has plenty of worse people who he could appointed instead isn’t a compelling reason IMO to rubberstamp any of his nominees. If Bernake were rejected, the burden wouldn't be on the Senators who vote “nay” to offer a more suitable replacement but on the POTUS.
Actually, the nanny issue refers (I think) to the failed nomination of Bernard Kerik to head DHS for failing to pay social security taxes on a nanny he had hired for his kids.
"Throwing markets into turmoil as we toss Bernanke aside and start over?"
The markets show every sign of needing to be thrown into turmoil because...
A. Sooner or later the financial industry needs to be returned to its proper place in the economy, and...
B. Wall Street gives every indication of not having learned a damn thing from its near death experience less than 18 months ago.
It was necessary to coddle the market to prevent a second Great Depression, but it's going to be equally as necessary to kick some ass or it will have all been for naught.
Mike
There seems to be wide agreement that Bernanke is at least disappointing, and at worst out of control, but there's no one better on the horizon.
Under the circumstances, the result - reconfirm him but beat him around a bit as with the DeMint statement - seems about right from the Senate perspective.
There are also two questions. One is whether the Senate, by dumping Bernanke, would be likely to get someone better. Probably not.
The other is whether Obama could have nominated someone better. I don't know, but it's worth asking.
The other is whether Obama could have nominated someone better. I don't know, but it's worth asking.
Yes, Stiglitz! But Megan would say not since he doesn't share her politics.
Megan - Im not going to argue that they should have booted out Bernanke. But, i think you're going a little easy on him. He's one of the foremost experts on the Great Depression and has written extensively about the failures of monetary policy during the depression and the subsequent negative impact on the economy. If we could have picked the perfect guy to help manage the response to early indications of recession this time it would have been Bernanke.
Yet, it's arguable that Bernanke's response has been just as bad as the response to the Great Depression. Paying interest on reserves, leaving rates at 0.25% instead of 0%, failing to engage in unconvential easing -- all of these things have made our current situation worse. Not saying anyone else would have done better (or at least anyone who could have survuved the political nomination process), but Bernanke does not deserve glowing marks.
I second this. He seems to have forgotten everything he knew about the causes of the Depression.
MM: Bernanke's Confirmation Moves Forward
Certified Expert in Financial Crises..Hmm
Red Adair was an experienced expert in
putting out oil well fires; How many
burning Economies has Bernanke saved ?
Is too good to fire like too big to fail ?
Single point of failure is an engineering
dirty word; We need to re-engineer our
economy so that it does not have any.
Major props for working Red Adair into this thread!! He's a legend down in Texas.
Except in order to "re-engineer" the economy and remove the single points of failure, we'd have to engineer government *out* of it.
And we all know we can't have that...
Never trust anyone over 12 who tweets.
Contra Megan, Bernanke's handling of the financial crises to date has been absolutely pedestrian. I don't think there's another academic macroeconomist would would have done anything differently.
His vaunted scholarship of the Great Depression is nonsense.
And there are more important things that "keeping the S&P high". Like having a financial system that is not a psychotic predatory vampire squid.
Amazingly, I find myself in agreement with Alsadius.
"It's getting harder and harder to get people into office, especially in finance, where any nominee who knows anything is too apt to have ties to the banking industry, or have employed a nanny without paying social security taxes, or have some other disqualifying flaw that doesn't actually have much bearing on their ability to do the job."
As far as I know, Conan O'brien doesn't have those problems and has been available for almost a week. Did Obama even ask him if he was interested? I doubt it.
O'bien might not have a PHD in economics, but has one other giant quality that's crucial for federal government service. He's a clown.
He seems to be doing a hell of a lot better than I am financially, too.
There will be turmoil. There always is when a Ponzi scam ends. But the guy who figures out how to keep the scam going for a few more months is not a savior. By delaying the turmoil, he only makes it worse.