Sunday, January 24, 2010

Ben Bernanke: Reappointed By Default?

Things are getting dicey for Fed Chairman Ben Bernanke.

His re-appointment as Fed Chairman, once assured, now
may be in jeopardy largely through no fault of his own.

"Helicopter Ben", as he is widely referred to in the financial
press, has been the object of much criticism and derision
lately, mostly by scapegoat-seeking politicians on Capitol
Hill now suddenly worried about their re-election prospects.

While his unflattering sobriquet is rightly attributed to
his off-the-record comment that if his detractors didn't
like what he was doing he could just as well scatter dollars
from a helicopter, much of the recent criticism of Fed policy
should not be laid at his feet.

Rather, the blame should be laid at the feet of the politicians
who did so much to create our economic mess.

Remember, Ben didn't create the hated TARP - the Troubled
Asset Relief Program for the Banksters - the politicians did.

Neither did he create the moral-hazard enabling TLGP -
the Temporary Liquidity Guaranty Program. The politicians

For those of you who aren't economists, that's the "interest-free
discount window" program that has let the Banksters
recover to health at the expense of the taxpayer and the
Main Street economy.

And Dr. Bernanke didn't create the troubled asset
purchase program that allowed the TBTF banks to off load
their toxic mortgage waste onto the Fed's books and thus by
extension onto the taxpayer. The politicians- especially
Sen. Chris Dodd and Rep. Barney Frank, are responsible for
that one as well.

In fact, every time you see a "Fed" problem, you'll find a
special-interest-beholden politician up to his neck in it.

Which to me makes the "outrage" against Dr. Bernanke on
Capitol Hill more than just a little hypocritical. In fact, if Dr.
Bernanke can be faulted for anything, it's for not standing up
to these Solons of Special Interest more frequently and forcefully.

And the Carter-like silence of President Obama on the matter
(until very recently) hasn't helped the situation any.

But, be that as it may, the Hand of both the Senate and the
Administration on Bernanke's re-appointment may
soon be forced.

It appears that no one else really wants the job.

In a recent editorial opposing Bernanke's re-appointment,
The New York Times proposed its own economic columnist
Paul Krugman for the position.

However, Krugman, an eminently qualified Nobel Laureate,
was quick to fire back the next day that while he was appreciative
of the compliment, he didn't want the job.

Like many others, Paul Krugman would rather be a critic
than a participant.

Another name that has been floated is former Fed Chairman
Paul Volcker - appointed by Jimmy Carter in 1979 and
re-appointed (though not without a struggle), by
Ronald Reagan in 1983.

But Mr. Volcker has one problem - at 83, he's well past
retirement age, and while still vigorous and active, he's
already come out of retirement to take a very necessary job;
that of Chairman of President Obama's Economic Recovery
Advisory Board.

As far as Team Obama is concerned, he needs to stay in place -
he's the only adult in the room on the President's economic team.

So, when all is said and done, it looks as if the job is Ben's - that
is, if he doesn't decide to say "F**k It" and chuck it altogether.

If he does, there are a couple of names I would put in nomination
for the position.

The first is Dr. Simon Johnson - a distinguished Professor of
Financial Economics and Entrepreneurship at MIT, and the
former Chief Economist of the IMF. Equally important, he
has been a longstanding and vociferous critic of the Banksters
and their control over the elected government.

Johnson's entertaining and informative blog, The Baseline
, can be read right here at the Thinking Nationalist.

Another possibility would be Dr. J. Bradford Delong,
distinguished Professor and Chair of the Department of
Political Economy at the University of California Berkeley.

Dr. Delong has been a lifelong student of the interplay
of politics and economics, and is an authority on
"Crony Capitalism" as it has manifested itself in advanced

Although Dr. Delong is closely identified with Larry Summers
(the enfant terrible of Obama's economic team) in the
academic literature, and is in my opinion on the wrong
side of the issues of free trade, globalization, and outsourcing,
he would be a voice of moderation and maturity at the Fed,
who would also be well-known to the President's economic

His twice-weekly blog, Grasping Reality With Both Hands,
can also be read here at The Thinking Nationalist.

But, if no one else steps up and applies for the job, it's time
for the Senate to stand up, be counted, and do its duty.

Give Helicopter Ben another four-year lease on the Huey.


  1. Bravo sir.

    Larry Summers is despised on both the right and the left, and for all the correct reasons from both sides. He should go!

    It is a pity the most educated among us get into the judgement trap and are too lazy to actually apply their knowledge. Criticism is easy and action is hard, yet only the most noble of us take part in good action.

  2. Ben Bernanke is just as much the elitist politico as anyone else. Don't be fooled!