On Thursday, Ben Bernanke will sit in front of the Senate Banking Committee as it discusses whether he should get a second term as Fed Chair, but the debate started raging yesterday. In an editorial in the Washington Post Bernanke argued against Sen. Chris Dodd’s new regulations that would strip the Fed of much of its power. The measures “would seriously impair the prospects for economic and financial stability in the United States,” he wrote. He also wrote how a House plan sponsored by Rep. Ron Paul would “undermine the confidence the public and the markets have in the Fed.” Of course, that assumes the public and the markets still have confidence in the Fed.
Meanwhile, at least one Senator came out against a second term for Bernanke.”If he’s the smartest guy in the world, why didn’t he do anything to prevent us from sinking into this disaster that Wall Street caused and which he was a part of?” Sen. Bernie Sanders, who plans to oppose Bernanke’s reconfirmation, asked on ABC yesterday. Even with Sanders’s opposition, Bernanke is expected to win confirmation, giving everyone another four years to make beard jokes.
Bernanke Starts Fed Debate Early [WSJ]