Thursday, January 21, 2010

"In Peril"

Earlier on Thursday, I heard from a DC contact about some strange rumblings on the Bernanke nomination. Then late in the afternoon, this from Roll Call:

Ben Bernanke’s nomination to serve a second term as chairman of the Federal Reserve appears to be in peril. Bernanke is up for a second term at the Fed; his current term expires in 10 days on Jan. 31. A handful of Senators had previously threatened to filibuster the nomination, but this week the number of opposing lawmakers appeared to grow, further dimming his prospects for installment. ...

At Wednesday’s Democratic caucus meeting, according to Senators, liberals spoke out against confirming Bernanke for a second term. Those liberals tried to make the case that the White House needs to put in place fresh economic advisers to focus on “Main Street” issues like unemployment rather than Wall Street concerns. Moderates were more reserved, Senators said, but have similarly withheld their support for Bernanke. ...

Bernanke’s nomination is already the subject of holds by GOP Sens. Jim Bunning (Ky.), Jim DeMint (S.C.) and David Vitter (La.), as well as Independent Sen. Bernie Sanders (Vt.), who caucuses with the Democrats. Reid will likely have to file a procedural motion to overcome the holds, a move that will require 60 votes. But with support among Democrats for Bernanke seeming to wane, it’s unclear whether Reid can meet that mark.

More here and here. If healthcare reform was the first casualty of the election in Massachusetts, the Fed chairman may be the second. This is an extraordinary turnabout from what looked like a contentious but ultimately successful Senate vote just a few days ago (and for longtime Fed watchers, it's fascinating). In mid-December I wrote, "If Obama had waited until now to make the nomination, he would probably have picked someone else." After Massachusetts and in light of the White House's sudden interest in financial reform on Thursday, he probably has a serious case of buyer's remorse about Bernanke.

I sometimes get email from readers who want to know the best way to take action on an issue that interests them. Post-Massachusetts, any senator about to vote on Bernanke is exquisitely and justifiably sensitive to public opinion. This nomination is hanging in the balance right now. If enough constituent calls and emails warn about being watched and held to account for how one decides to vote, it's a nomination that can be broken.


Anonymous KAIMU said...


I am not sure that it matters. The US FED is a "bank cartel", much like we used to have an "oil cartel" running oil prices we now have a "money cartel" running money prices.

Eliminate the US FED. Over the past 97 years their track record has been abysmal. I would prefer the GAO take over the US FED duties and even David Walker could replace Bernanke or Volcker. Why not? Who in God's name has more experience dealing with the US government debt? Who is more transparent than a whistleblower on 60 Minutes?

1/22/2010 9:25 AM  
Anonymous Anonymous said...

Time to start looking into Kohn's record over the past few years.

1/22/2010 11:04 AM  
Anonymous Anonymous said...

Elizabeth Warren should be put in charge since she is the only one who is actually aware of the strife that is being foisted upon the middle class. Without a middle class this country is done, if it isn't already.

1/22/2010 2:03 PM  
Blogger Jimmy the Saint said...

Anon 2:03:
While I like her, she doesn't have the background necessary to run the Fed. I'd prefer Stiglitz because he gets it, too.

1/22/2010 8:19 PM  
Anonymous Anonymous said...

I agree with your choice of Stiglitz as a first choice but it seems that this administration doesn't consult with him. I wonder why that is? Any thoughts would be welcomed.

1/23/2010 8:00 AM  
Anonymous goldhorder said...

LOL...because this administration didn't give a rat's a$$ until they lost Ted Kennedy's seat. It has suddenly dawned on them that hey...we are going to get trounced in the next election. What propaganda methods should we employ to make it look like we are doing some sort of financial reform without worrying our bankster bosses too much?

1/25/2010 4:08 PM  
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2/22/2010 2:51 PM  

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