Larry Summers is not happy…
He wanted Ben Bernanke’s job, but he’s not going to get it. Reuters:
U.S. President Barack Obama will reappoint Ben Bernanke for a second term as chairman of the Federal Reserve on Tuesday, a senior administration official said on Monday.
Bernanke, whose four-year term as head of the U.S. central bank ends on January 31, 2010, will also be praised by Obama for his handling of the financial crisis, the official said.
If Summers was the only other option on the table, then I’m not so disappointed Bernanke is sticking around. That said, I think Fed policy under Bernanke has been terrible. The Greenspan interventions he supported inflated the largest credit bubble in 80 years; the de-leveraging that needs to happen to correct the damage has been delayed indefinitely by Bernanke’s own interventions.
His supporters say he averted a second Great Depression. I disagree. He’s merely delayed it. The liabilities of the financial and consumer sectors haven’t gone away, they’ve merely been absorbed by the public balance sheet. This is as much Hank Paulson’s and Tim Geithner’s fault as it is Bernanke’s. I’m not thrilled with their leadership either.
Just my 2¢