by desmoinesdem, Thu Jan 28, 2010 at 08:36:49 PM EST
The Senate voted to confirm Ben Bernanke as chairman of the Federal Reserve today, but it was hardly a ringing endorsement:
The 70 to 30 vote was the thinnest approval ever extended to a chairman in the central bank’s 96-year history.
The confirmation was a victory for President Obama, who had called Mr. Bernanke an architect of the recovery, but also signaled the extent to which the Fed, once little known to the public, has become the object of populist outrage over high unemployment and Wall Street bailouts.
In several hours of debate, senators said the Fed had abetted, then ignored, the housing and credit bubbles and allowed banks to keep dangerously low capital reserves and to make reckless lending decisions that ruined consumers. Some even blamed Mr. Bernanke for the falling dollar and questioned his commitment to free enterprise.
In contrast, Mr. Bernanke’s supporters were muted. Like a mantra, they said that the Fed had made mistakes but that Mr. Bernanke had helped save the economy from a far worse recession.
Eleven Democrats, 18 Republicans and independent Bernie Sanders voted against confirming Bernanke (roll call here).
Senators of both parties who opposed Bernanke said his monetary policy and poor oversight contributed to the financial meltdown of 2008. Various Democrats who voted against Bernanke said he had been too beholden to Wall Street interests. Senator Chuck Grassley of Iowa surprised me this week by claiming Bernanke wasn't doing enough to prevent high inflation from returning. I would think that in this economic environment, with high unemployment and declining wages, deflation would be more of a concern than high inflation.
I still think it was a mistake for Obama to nominate Bernanke for another term, but let's hope the Fed chairman improves on the job.
UPDATE: MIT economist Simon Johnson considers Bernanke's reappointment and confirmation "a colossal failure of governance. Worth a read.
SECOND UPDATE: I should have mentioned that seven senators voted for cloture (allowing the Senate to proceed to consider Bernanke's nomination) before voting against confirming him. Here is the roll call on the cloture vote. The senators who voted for cloture but against Bernanke are Democrats Tom Harkin (IA), Barbara Boxer (CA), Byron Dorgan (ND), Al Franken (MN), Ted Kaufman (DE), and Sheldon Whitehouse (RI), along with Republican George LeMieux (FL).