The New York Times describes today (hat tip reader Peter A) how more and more Senators are voicing public opposition to a confirmation of a second term for Bernanke:
The confirmation of Ben S. Bernanke to a second four-year term as chairman of the Federal Reserve ran into further trouble on Friday as two more Democratic senators said they would vote against him…
In a statement Friday morning, Senator Barbara Boxer, Democrat of California, came out against Mr. Bernanke, who was named to his post during the Bush administration. She said she had “a lot of respect” for him and praised him for preventing the economic crisis from getting even worse. “However, it is time for a change,” she said. “It is time for Main Street to have a champion at the Fed.”
“Our next Federal Reserve chairman must represent a clean break from the failed policies of the past,” Ms. Boxer said.
Another Democratic senator, Russell D. Feingold of Wisconsin, also announced Friday that he would vote against Mr. Bernanke.
“Under the watch of Ben Bernanke, the Federal Reserve permitted grossly irresponsible financial activities that led to the worst financial crisis since the Great Depression,” Mr. Feingold said in a statement…
Several liberal Senate Democrats have said they remain undecided as well, and in a sign of the uncertainty on the Democratic side, Mr. Reid has asked Mr. McConnell to count the votes on the Republican side.
Yves here. It’s troubling that the Times repeats the “populist anger” mantra:
To some degree, Mr. Bernanke is caught up in the same kind of populist anger that defined the Massachusetts Senate race, in which the Republican candidate, Scott Brown, pulled off a remarkable upset….
Yves here. The real issue is that the Fed did a horrid job in the run-up to the crisis (although not Chairman at the time, Fed records show that Bernanke was a major architect of the super-low interest rates earlier in this decade that super-charged the credit bubbles, and has long been manifestly uninterested in regulation). So the issue is competence. The public’s anger is warranted, and reflects lack of sufficient action on real, festering problems.
This could get interesting:
Allan H. Meltzer, a professor at Carnegie Mellon University and an expert on the Fed, said that the Senate had never voted to outright reject a nominee for Fed chairman and that he knew of no instance in which the president had withdrawn the nomination of a Fed chairman after it was clear that the Senate would not confirm.
And we get the typical threats:
Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the Banking Committee, warned on Friday that a no vote would send the “worst signal to the market right now,” and could lead to an economic “tailspin.”
Bernanke and Dodd seem to have forgotten Fed chairman William McChesney Martin’s dictum, that the job of the Fed is to take the punchbowl away when the party starts getting good. Drying out Wall Street, like dealing with any addict, will not be a pleasant process.
Update 8:00 PM: Roll Call is more pointed:
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.