Sanders Organizes Opposition To Bernanke Reappointment
01/26/10 5:50PM By Bob Kinzel
| MP3 || Download MP3 |
(Host) Senator Bernie Sanders is organizing a coalition of U.S. Senators to deny Federal Reserve Board Chairman Ben Bernanke another term in office.
The Obama Administration is fighting Sanders' efforts.
VPR's Bob Kinzel reports.
(Kinzel) This is one of those times when the political spectrum is a circle and not a horizontal line.
Sanders, one of the most liberal members of the Senate, is joining forces with one of the chamber's most conservative members, South Carolina Republican Jim DeMint, to oppose the re-nomination of Fed chairman Bernanke.
Sanders says the issue is clear:
(Sanders) "I think it's just very wrong to appoint somebody who was asleep at the switch, whose job is to protect the safety and soundness of our financial institutions and he didn't do it. He failed and I don't know that you reappoint somebody who failed so terribly at the most important thing that he's supposed to be doing."
(Kinzel) The Obama Administration is predicting a melt down on Wall Street if Bernanke is not re-nominated. Sanders thinks this is a very weak argument:
(Sanders) "The idea that there is only one person
in the United States of America who can run the Fed - no other economist out
there - and Wall Street has said that there's going to be a massive sell off
unless we give them their guy. I don't think that passes the smell test, I
don't think that's what American democracy should be about."
(Kinzel) Why are the two sides of the political spectrum in the Senate joining forces to defeat Bernanke?
Middlebury College political science professor emeritus Eric Davis says there are very different agendas at work:
(Davis) "The liberals oppose him because they say that the Federal Reserve hasn't done enough to deal with unemployment, to extend credit to small businesses, to homeowners and so forth. The conservatives who oppose Bernanke feel that the Federal Reserve created the financial crisis with some of its policies - keeping interest rates too low for too long."
(Kinzel) Davis doesn't expect Sanders to be successful in blocking the nomination, but he says the campaign against Bernanke could have some impact of future Fed policies:
(Davis) "It may be that one of the consequences of Bernanke being confirmed with say 25 or 30 votes against him...is the Fed at the margin may do a little bit more in terms of its regulatory policy to try and encourage big banks to extend credit."
(Kinzel) The full Senate is expected to vote on the Bernanke nomination by the end of the week.
For VPR News, I'm Bob Kinzel in Montpelier.