Politically Thinking: Bernanke takes economic spotlight

Federal Reserve Board Chair Ben Bernanke has been on a publicity offensive for the last several months. He wants to mobilize support for his own renomination for another term and to oppose several bills making their way through Congress that would strip the Fed of some of its powers or subject its decisions to more review on Capitol Hill. Bernanke has appeared on 60 Minutes, written op-ed columns for major newspapers, and held a town hall meeting in Kansas City that was broadcast on PBS. Last week, the editors of Time magazine named Bernanke their “person of the year.” Time presented a 24-page package of articles about the Fed chair that reads as if it could have been written by Bernanke’s own communications staff. From the cover illustration of Bernanke’s head inside a dollar bill to the photo of the chairman shooting baskets in the Fed’s gym, the theme of the articles is that Bernanke saved the economy from collapse, and that, besides, he is a “regular guy” at heart. The Time Bernanke story is a good example of a disconnect between the mainstream media and the American public. Most stock market indices have increased by more than 20 percent in 2009, and more than 50 percent from their March lows. Most Wall Street banks have rushed to pay back their TARP funds so they can get out from under government pay restrictions and give their staff huge bonuses in early 2010. Yet polls indicate that economic insecurity remains at very high levels among the American public. Large numbers of Americans continue to be worried about the future of their jobs and their ability to make ends meet in 2010. Last week’s Wall Street Journal/NBC News poll showed that 55 percent of Americans think the country is “off on the wrong track,” a good measure of discontent with the economy.Chairman Bernanke himself is held in low esteem by many Americans. A Research 2000 national poll conducted earlier this month included the question, “Who do you think that Federal Reserve Chairman Ben Bernanke cares about more, Wall Street or Main Street?” While 33 percent of those polled said they were not sure of their answer, of those who had a position, more than twice as many (47 to 20 percent) said Bernanke favored Wall Street over Main Street. The poll results showed almost no differences among major demographic and political groups in their assessment of Bernanke. This is in striking contrast to the polarization seen in polls about President Obama, health care, and Afghanistan, where Democrats and Republicans answer survey questions in markedly different ways.Bernanke’s four-year term as chair of the Fed expires on Jan. 31. Last week, the Senate Banking Committee recommended, by a vote of 16-7, that the full Senate confirm him for another term. The votes against Bernanke included six of the committee’s 10 Republicans, and one Democrat, Jeff Merkley of Oregon. Bernanke’s nomination will go to the Senate floor in January, but confirming him by Jan. 31 may be a challenge. Senator Bernie Sanders, who is not a member of the Banking Committee, has put a “hold” on Bernanke’s nomination, meaning that 60 votes will be needed to break the hold and confirm him. The Senate will not return from its winter recess until Jan. 19. If Bernanke is not confirmed by Jan. 31, he could continue as a member of the Federal Reserve Board, but vice chair Donald Kohn would serve as acting chair after that date.<i>Eric L. Davis is professor emeritus of political science at Middlebury College.</i>

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