By a better than two-to-one margin, Americans think Federal Reserve Chairman Ben Bernanke puts Wall Street ahead of Main Street, according to a new poll by a liberal advocacy group.
The poll numbers come on the eve of a crucial confirmation vote in which senators will decide whether Bernanke should keep his job. Already, at least five Democratic and Republican senators have placed “holds” on his nomination, temporarily blocking it from moving forward.
The poll, commissioned by the Progressive Change Campaign Committee (PCCC) and Democracy for America, recently asked more than 800 voters a simple question: “Who do you think that Federal Reserve Chairman Ben Bernanke cares about more, Wall Street or Main Street?”
Forty-seven percent of respondents said Bernanke favors Wall Street; 20 percent said Main Street; the rest weren’t sure.
The results were largely similar across party lines, geography, sex, race and age. Independents, however, said they think Bernanke favors Wall Street by a three-to-one margin, the highest disparity recorded by the poll.
“This poll proves that Americans simply don’t trust Ben Bernanke. Any senator who votes to confirm Ben Bernanke will make a statement that they care more about Wall Street bankers than their constituents,” Aaron Swartz, PCCC’s co-founder, said in an e-mail. “If Bernanke was smart, he’d withdraw his name.”
Bernanke has been under fire for the past two years. In 2007, he misjudged the fallout from the subprime crisis, telling members of Congress that the burgeoning disaster in the nation’s housing markets seemed “likely to be contained.”
Last year, after the Fed began its historic intervention into the markets by facilitating JPMorgan Chase’s purchase of Bear Stearns, many free-marketeers were alarmed by the government’s heavy hand. That was followed by a series of taxpayer-funded bailouts.
Since then, the Fed’s balance sheet has exploded. It now stands at about $2.2 trillion, a 132 percent increase in the amount of its lending to the financial system from the start of 2008, according to Fed data.
It has purchased $854 billion in mortgage-backed securities just over the past year, enabling banks to profit handsomely from new mortgage loans as they shovel the risk to taxpayers while pocketing the fees.
The Fed is also paying banks interest on the $1.1 trillion in excess reserves they’re holding, giving them an incentive to keep the cash in the vaults as opposed to funding new loans.
Meanwhile, the Fed steadfastly refuses to release key details on the full extent of its activities, particularly those that would shed light on its bailout-related actions. The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral against those loans under nearly a dozen programs. Specific Congressional authorization wasn’t required for these programs. At least one lawsuit from a news organization compelling disclosure is pending.
On the “Main Street” side of the equation, the Fed has come under fire for its lax consumer protection record. Last Friday the House of Representatives voted to strip the Fed of its consumer protection authority. The Senate may do the same.
As the head of the central bank, Bernanke is the likeliest target for public and Congressional outrage. A bipartisan coalition has been pushing Congress to delay his confirmation until he and the Fed answer certain questions and disclose certain information. The House recently voted to authorize an expansive audit of the Fed, a landmark achievement for critics of the central bank’s secretive operations.
The PCCC launched a “Stop Bailout Ben” petition and raised more than $20,000 for Sen. Bernie Sanders (I-Vt.) as a reward for his delaying tactic on Bernanke’s confirmation. Some 20,000 people have written Sanders a thank-you note on the PCCC’s website, the group says.
The Senate Banking Committee is scheduled to meet at 9:30
this Thursday morning.