Via fatster in comments, Iowa Democrat Tom Harkin has become the latest Democrat to oppose Ben Bernanke’s confirmation for a second term at the Federal Reserve.

Harkin said Bernanke enabled the financial and mortgage meltdowns of recent years by catering to big financial institutions and not requiring them to behave more responsibly […]

Harkin said Bernanke has been too lenient on financial institutions in not requiring them to trim compensation for executives or include low-interest loans for small businesses and renewable energy as part of the taxpayer-funded bailout.

Specifically, Harkin cited the Sept. 2008 bailout of insurance giant AIG as particularly permissive.

“He provided too much money with no conditions on trillions of dollars he provided of taxpayer money, and this is at near-zero percent interest,” Harkin said of Bernanke’s role in the AIG deal.

“I have for a long time been getting irritated with this concept of ‘too big to fail,’” Harkin said.

Meanwhile, Iowa’s other Senator, Chuck Grassley, has said he has reached a decision on the confirmation vote, but will not announce it. He seems to be most concerned about the Fed’s efforts to fight inflation – which all of their public and private statements and actions have endorsed – so he doesn’t seem to be well-informed on the issue.

Asked about whether market conditions would play a role in his vote, Harkin said, “Is our economic policy going to be held hostage forever by the Wall Street threat that total collapse is going to happen if we don’t do what they want?”

I have to wonder if Jeff Merkley’s warnings led Harkin to this conclusion. Merkley delivered a long Dear Colleague letter, available here, a nine-page indictment of Bernanke’s career, and how he “helped set the fire that destroyed our economy.” The letter details in multiple ways with how Bernanke failed to rein in derivatives and proprietary trading, failed to recognize the housing bubble and failed to respond to increased systemic risk, relying heavily on this Washington Post piece about the Fed’s reluctance to regulate in response to the financial crisis.

(If you’d rather read the short version of this, check out Dean Baker, or Sen. Merkley’s remarks on Bernanke yesterday on Bloomberg.)

Of course, the right question for Harkin, apparently, is not whether or not he will vote against Bernanke, but whether or not he will deny the procedural vote, in the same manner of every other vote in Washington according to everyone you talk to, except for the Bernanke nomination, somehow.

David Dayen

David Dayen

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