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The Latest On Bernanke

I just got off my liveblogging shift and I’m a bit fried, but here’s where we are on the Bernanke confirmation.

• In a Friday news dump, Harry Reid went ahead and announced support for Bernanke. It wasn’t exactly a ringing endorsement.

“Every decision I make about our economy is governed by the goal of putting Nevadans and Americans back to work, helping them keep their homes, and strengthening the middle class. My vote to confirm Ben Bernanke for a second term as Chairman of the Federal Reserve is no different.

“That goal also guided the conversation I had with Chairman Bernanke yesterday about his vision for a second term – a dialogue that continues. I made it clear that to merit confirmation, Chairman Bernanke must redouble his efforts to ensure families can access the credit they need to buy or keep their home, send their children to college or start a small business. He has assured me he will soon outline plans for making that happen, and I eagerly await them […]

“While I will vote for his confirmation, my support is not unconditional. I know Chairman Bernanke is committed to transparency and accountability, and that is why I will hold him to the highest standards of both. The Senate will continue to demand visible and responsible results for the people we represent.

“Foreclosures and unemployment are endemic in Nevada. The American people are frustrated, and rightly so. I share their frustration, and I will continue to impress upon Chairman Bernanke that his most important job as America’s central banker is to give families and businesses the peace of mind that their economy is working for them.”

To me, that sounds like he doesn’t want to do it, but has been impressed into an endorsement.

• What I’ve heard is that Reid asked McConnell for a whip count, and McConnell responded by asking Reid for one. Reid clearly wants to know how many votes he can allow as No’s on Bernanke, but McConnell (Suh-prise!) isn’t cooperating.

• Jeff Bingaman (D-NM) is a yes. Chris Bowers has a good whip count. Bernanke has five Democrats opposed, and four Republicans supporting. If that doesn’t change, that doesn’t add up to 60.

• Here’s a more detailed list of possible replacements.

• Ryan Grim and Sam Stein have a great tick-tock called “How Bernanke Became A Toxic Asset.” I’m reminded of the fact that Bernanke was made Time’s Man of the Year last month. To go from that to being unceremoniously dumped in 31 days would be incredible. Here’s an excerpt:

Then Massachusetts happened. The election of Republican Senator-Elect Scott Brown on a wave of anti-Wall Street, anti-bailout sentiment was, as Sen. Bernie Sander’s (I-Vt.) deemed it, a “wake up call to many Democrats” considering Bernanke.

“I think Tuesday’s election reinforced that the American people are appropriately outraged by the behavior of Wall Street for creating this crisis and wanting to go back to business as usual after this,” Sanders told the Huffington Post. “Was Massachusetts a wakeup call to many Democrats, that the American people are profoundly disgusted with Wall Street, want changes and want a new chairman of the Fed? I’d say yeah.” […]

“It ain’t that hard,” he said to the Huffington Post. “It isn’t that hard to figure out. If you are a Democrat you ask yourself right off the bat why would we be reappointing not only the individual that George W. Bush appointed to the Fed, but someone who was a member of the Bush administration? Why would you want to do that when the country faces today the most severe economic crisis since the Great Depression?”

• Jeff Merkley did a Q&A with the Wall Street Journal which elaborated on what his colleagues are asking him, the only member of the Banking Committee to vote against Bernanke:

A lot of folks have been coming up to me in the hall, saying that they want more information and that they’re seriously considering voting against him, or that they’re leaning towards voting against him.

Are they asking you for more information?

Some have. … The main points I’ve been making are that there are at least four major issues that happened in the course of the last eight years: expansion of proprietary trading, derivatives, the lifting of leverage and the failure to address the dysfunction in the [regulation of] mortgages — that is, the kickbacks, the yield spread premiums and the prepayment penalties. While not all of these were the responsibility of the Fed, very much in his role as chair of the Council of Economic Advisers, as a member of the Fed, as chair of the Fed, he was at the economic policy table and did not raise concerns about these major issues that had systemic impact.

Later in the piece, the authors claim that 10 or 15 Democrats may be against the confirmation. That would be fatal.

• The establishment wankersphere is trying to claim that the markets are jittery because of the uncertainty surrounding Bernanke. The establishment wankersphere is advised that the vast majority of people do not give a whit about jittery markets or, especially, jittery Wall Street investors. They want an ass-kicker in there.

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David Dayen

David Dayen