This morning, Senator Jeff Merkley, a freshman Senator from Oregon, announced he would vote against Bernanke’s confirmation:
Tomorrow, I will vote against confirming Ben Bernanke as Chairman of the Federal Reserve. The reason, in short, is that as Chairman, Dr. Bernanke failed to recognize or remedy the factors that paved the road to this dark and difficult recession. Following our economic collapse, it is also apparent that he has not changed his overall approach to prioritizing Wall Street over American families.
My decision is based on my fundamental belief that our economy cannot recover if we do not put Main Street first.
Our nation is just beginning to emerge from the greatest financial crisis since the Great Depression, and there is no guarantee we will continue on the road to recovery over the long or short terms. Unemployment remains far too high, credit is unavailable to too many businesses, and families are plagued by falling home prices and high foreclosure rates. Even as we move forward with our efforts to get our economy back on track, it is critical we carefully examine what led us to this point.
For too many years, federal regulators turned a blind eye to signs of an impending financial crisis. Tricks and traps proliferated in the credit card and consumer lending industries. Predatory mortgage loans exploded, fueling an unsustainable housing bubble. Regulators lifted rules requiring banks to keep adequate capital, and a laissez-faire approach to securitization, derivatives, and proprietary trading encouraged excessive risk-taking on Wall Street….Dr. Bernanke supported each of these decisions, failing to take the necessary precautionary steps that could have averted or mitigated financial collapse..
We need economic leaders who understand that the ultimate goal of economic policies and the key to meaningful economic recovery should be financially successful families, not oversized Wall Street profits.
Indeed, it should be recognized that although Wall Street prospered in the short-term from reduced leverage requirements, securitization of faulty mortgages, and the explosion of derivatives, Americans did not. The expansion that occurred from 2002 to 2007 became the first economic expansion in which working families were worse off at the end than at the beginning. This is not a path that we can afford to travel again.
While it is still likely that Bernanke will be approved by a large margin in the Senate Banking Committee vote tomorrow, this move is significant because:
1. Markley is a freshman Senator who is defying Democratic leadership, which is trying to jam the nomination through. He is clearly more concerned the interests and views of his constituents. While many Republicans are opposed to his confirmation, a Democratic defection is significant. It says at least some Senators believe the public is taking note of this vote, and they do not want to be on the wrong side of it.
2. Disapproval of Bernanke runs high. We cited a Rasmussen poll that found a mere 21% approved of Bernanke’s confirmation about two weeks ago, with nearly twice as many disapproving. A poll released today found that by an even larger margin (more than 2 to 1) Americans believe that Bernanke favors Wall Street over Main Street.
3. Note that Merkley took his stand the very same day Time announced Bernanke as Man of the Year. What favors were exchanged for THAT to happen? As reader Vinny asked, did Time Warner become a bank holding company recently? But perhaps I am too cynical here; after all, such august figures as Hitler and Stalin (twice) were also Man of the Year, so the recipient merely needs to have had an impact, not necessarily a positive one.
Please keep the pressure on. If you have time, call one or both of your Senators and say you disapprove of the confirmation. Please call a LOCAL (meaning in-State) rather than DC office (those calls get more serious consideration, I am told).