Sanders AimsTo Block Bernanke Confirmation
12/03/09 5:50PM By Bob Kinzel
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(Host) Senator Bernie Sanders says he's doing everything he can to block the confirmation of Federal Reserve Board chairman Ben Bernanke to a second term in office.
And an unusual coalition of very conservative and very liberal groups is backing Sanders on the fight.
VPR's Bob Kinzel reports.
(Kinzel) In the jargon of the U.S. Senate, Sanders has put a "hold" on the Bernanke nomination which means that Senate leaders will now have to find 60 votes to support the confirmation on the Senate floor.
Sanders says Benanke doesn't deserve a second term in office because the Federal Reserve has allowed the country's financial system to engage in questionable activities for a number of years:
(Sanders) "The question is how you could have allowed that much speculation to go on, that much recklessness to take place, without knowing what was going on. Which then led us to the financial collapse and the recession that we're in ... They really did not do their job and when you have football coaches who keep losing games you have to bring in somebody who is new."
(Kinzel) Sanders says he wants a Federal Reserve chairman who will take steps to support middle income people and small businesses - that's something he says Bernanke has failed to do:
(Sanders) "The Fed has the authority to tell bailed out banks to put a cap on the interest rates they're charging people for their credit cards. So instead of seeing 25 or 30% interest rates you'd see 15%. The Fed has the authority to tell bailed out financial institutions to start making low interest loans available to small and medium sized business who are really in desperate need of those kinds of loans right now."
(Kinzel) Sanders has also introduced legislation that expands the government's authority to audit the work of the Federal Reserve. The bill already has 30 co-sponsors:
(Sanders) "Since the collapse of Wall Street the Fed has greatly expanded its role and among other things they have lent out trillions - I'm talking about trillions of dollars - to financial institutions. And we don't know who received the money, we don't know what terms they received the money under, we don't know if there are any conflicts of interest and that to me is just totally absurd."
(Kinzel) Not everyone agrees with Sanders. Economist Dick Heaps works at Northern Economic Consulting. He thinks Sanders' efforts will further politicize monetary policy debates and he says politicians rarely have the courage to take the tough steps that are needed to strengthen the economy:
(Heaps) "They're always making statements along the line, which sound very good, of ‘we will take policies until everyone who wants a job has a job' - which means they would never be willing to use monetary policy to constrain inflation when they had to...and as a result you need an independent organization to do that."
(Kinzel) And Heaps says Congress's track record on dealing with the economy isn't very good:
(Heaps) "Fiscal policy in this country, we all know, is a mess. And the folks that have been in our Senate and our Legislature for years and years have created that problem and they can't deal with their own mess. We certainly don't want them in charge of monetary policy."
(Kinzel) Sanders says he's hopeful that his audit legislation will be considered on the Senate floor in the next few months.
For VPR News, I'm Bob Kinzel.