In a previous post in August, when President Barack Obama re-nominated Fed Chairman Ben Bernanke to a new term as Federal Reserve Chairman, I wrote positive comments about this decision by the President. (see Blog posting dated 8/24/09)
While Bernanke could be questioned for certain decisions, he was the right person to have been at the helm during the peak of the financial crisis during 2007-2009. He made touch decisions, acted quickly and decisively, when action was desperately needed to avoid a worsening of the crisis. His academic background as an expert on the Great Depression was instrumental in the design of many of the Feds actions and programs that have been initiated since 2008.
His term as Chairman expires at the end of January (in the next week). Congress has still not voted for confirmation and a number of Senators are backing away from supporting his re-nomination. This uncertainty was a part of the stock market’s volatility and significant decline late this week. The markets do not like uncertainty. More uncertainty would certainly result if Bernanke was not approved by the Senate, as there is no logical next choice for Obama to select to succeed Bernanke. And even if he had to pick a successor, the Senate confirmation process would take months.
Regardless of one’s politics, the confirmation of Bernanke is needed and the proper step for the Senate to take. For a few Senators to block this nomination, for their own political reasons or concerns, would unnecessarily be doing great harm to the financial markets.