{"id":214377,"date":"2010-01-22T14:23:41","date_gmt":"2010-01-22T19:23:41","guid":{"rendered":"tag:business.theatlantic.com,2010:\/\/3.34051"},"modified":"2010-01-22T14:28:53","modified_gmt":"2010-01-22T19:28:53","slug":"bernankes-nomination-in-trouble","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/214377","title":{"rendered":"Bernanke’s Nomination in Trouble"},"content":{"rendered":"

Congressional Democrats seem to have decided, along with the President, that the key to electoral success is to be seen beating up on anyone in the financial community.  As a result, Bernanke’s nomination for another term as Chairman of the Federal Reserve is now in serious jeopardy<\/a>.<\/p>\n

I see the political logic, but the economic logic is pretty
\npoor.  Bernanke didn’t become Fed chair until 2006, long after it was
\nrealistically possible to do much about the bubble except wait for it
\nto pop.  He shepherded us through the financial crisis without another
\nGreat Depression–maybe not perfectly, but no Fed chair would have been
\nperfect.  The markets have confidence in him.  Spiking his nomination
\nmay have grim effects on 401(k)s throughout the land.<\/p>\n

Moreover,
\nwhatever he did that wasn’t popular, he clearly did with the connivance
\nof Congress.  Congress wanted him to pump money into banks; they just
\ndidn’t want to take political responsibility for it.  If they’d really
\nobjected, they could have amended the Federal Reserve Act at any time
\nand stopped him cold.  But they knew what he knew:  if the banking
\nsystem seized up, there would be absolutely enormous suffering.  They
\nwanted, as he did, to err on the side of creating moral hazard and
\nbailing out undeserving bankers, rather than bread lines and 25%
\nunemployment.<\/p>\n

Nonetheless, I’d now say it’s quite likely that
\nhis nomination will not make it through the Senate.  They need someone
\nto strike at to take voters minds off the health care bill and the
\ndebacle in Massachusetts.  I think Ben Bernanke just got nominated to
\nlean into the strike zone and take one for the team.<\/p>\n

What’s
\nslightly worrisome is what happens next.  A populist Fed chair sounds
\nfun–full employment for everyone!  But the Reagan recession is what
\nVolcker had to do in order to clean up the nasty aftereffects of fed
\nchairs that bowed to political pressure for easier money.  Remember
\nPaul Volcker, who everyone to the right of Chairman Mao now suddenly
\nloves?  He put short-term interest rates up to over 20%, and
\nunemployment up to over 10%, because it was the only way to cut off
\ninflationary expectations.

\n

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\n\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

Congressional Democrats seem to have decided, along with the President, that the key to electoral success is to be seen beating up on anyone in the financial community.  As a result, Bernanke’s nomination for another term as Chairman of the Federal Reserve is now in serious jeopardy. I see the political logic, but the economic […]<\/p>\n","protected":false},"author":80,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-214377","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/214377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/80"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=214377"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/214377\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=214377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=214377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=214377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}