The case against Bernanke being reappointed as Fed chairman

August 20, 2009

David Rosenberg of Gluskin Sheff outlines the bear case on Ben Bernanke getting reappointed by Obama:

Bernanke was a giant cheerleader for the leverage-induced economy during his time as the chief economist at the White House and while he was aggressive (and likely broke every rule in the book of central banking) in getting the credit market and economy back on track, he failed at the outset to realize the severity of the credit collapse and treated it as a liquidity event only for months

The Fed’s economic forecast that was published just over a year ago for late 2008 and 2009 is an embarrassment, to say the least. Valuable time was lost under his watch and the question is (i) does the Administration look at his entire record as opposed to his period as a White Knight, and (ii) will Mr. B end up being a scapegoat once the economy relapses in the fourth quarter and the unemployment rate makes new post-WWII highs along the way. See the front page of the NYT for more — Bernanke, a Hero to his Own, Still Faces Fire in Washington. The search committee is already out, by the way, and the likes of Blinder, Yellen, Ferguson and Summers are on it.

Me: I notice that Intrade has Bernanke at 80 percent, but contract is pretty lightly traded. I just keep thinking about the House Government Oversight Committee meeting concerning BofA and Merill where members from both parties basically said Bernanke was lying about his role in the merger. That can’t be good.

2 comments

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I don’t follow Ben’s pay schedule, but I wonder how much he makes a year. Where was Ben before this whole financial game play started? Let me guess playing lap dog with the rest of the financial institutions. Please, kick him to the curb! Where was the system of checks and balances this whole time that I learned about in high school. Who is fooling who? Give me a break! Where was Washington while all this subprime mortgage BS was going on? Oh I forgot there was $$ signs in the eyes of these so called experts that I hear about. The only experts I see are the ones that are the biggest con artists of the century. Please pull the wool over my eyes some more! Thanks experts! Thanks for all you do!

Posted by William | Report as abusive

They could eat their cake and have it too by keeping Bernanke and appointing a “Fed Czar” that Bernanke reports to. It’s a two-fer — the pesky Senate approval process could be skipped since “Czars” aren’t subject to that and Bernanke’s overlord would have the real power ;-)

Seriously though, how is anyone on that list a genuine improvement or change for the better?

Why not Paul Volcker? Agree or disagree with his philosophy, his appointment would represent a sea change.

Posted by Siobhan Sack | Report as abusive