Monday, January 25, 2010

Bernanke in the Cross Hairs, Part 2

I have heard from several reliable sources, and it has been reported in the news that President Obama and key members of his staff were on the phones with senators this weekend selling Ben Bernanke for another term as Fed Chief. So far the news looks good that they were successful. Bernanke's reappointment seemed to be in doubt on Friday as two Democratic senators, Russ Feingold of Wisconsin and Barbara Boxer of California, said they would vote against him. Fears spread quickly that a wave of populism among other senators might doom Bernanke's chances. Let's face it, we have to blame someone for the banking crisis, and members of Congress on both sides of the aisles are falling all over themselves to see who can talk the toughest to the "Wall Street" bankers. Since Bernanke is Chairman of the Federal Reserve Bank, he is a banker and, thus, he is fair game to be tarred and feathered along with all the rest. The only problem is Ben Bernanke and his colleagues at the Federal Reserve may have just saved the US and the world from another 1929-type depression. He is now being blamed for bailing out Wall Street and not bailing out Main Street. Indeed, the Fed, under Bernanke's leadership, has pulled every lever known to mankind and a few that none of us have ever seen before. And they have brought a level of normalcy back to the financial markets that few would have thought possible just a year ago. Main Street may not have seen a lot of improvement yet, but with time I am confident things will be better there, as well. I know there are strong feelings in many quarters against Mr. Bernanke, but I do not believe the financial markets will react well to a change of leadership right now. Here's how Bloomberg calls Mr. Bernanke's chances in the senate, so far: Yes, or inclined to yes---34 No, or inclined to no-----16 Undecided, or unknown-50 He needs 60 votes to assure reappointment. The vote is expected to come on Friday.