Cate Long: Senate Banking Committee Holds Hearing on Bernanke Confirmation: One Hot Committee Room

A fight’s a’brewin in room 538 of the Dirksen Senate Office Building… This is the committee room of the Senate Banking Committee.

Thursday, December 17 at 9:30, the Committee meets to vote on the reconfirmation of Ben Bernanke as the Chairman of the Federal Reserve…

Numerous Senators including Jim Bunning (R-Ky.), Jim DeMint (R-S.C.), David Vitter (R-La.) and Jeff Merkley (D-Ore.) have stated that they will vote against the reconfirmation of Federal Reserve Chairman Bernanke. Their disapproval of his tenure stems from Bernanke’s preference for the health of Wall Street over Main Street.

This contention has never been debated publicly, but supporters of the Federal Reserve insist that the large financial institutions had to be propped up so credit could flow through the American economy.

It’s the same argument that Treasury Secretary Timothy Geithner has made numerous times to justify the 100 cents on the dollar payments to AIG’s counterparties.

Sen. Merkley, a freshman Democratic Senator, announced today that he would be voting against the confirmation with this rational. He said:

My decision is based on my fundamental belief that our economy cannot recover if we do not put Main Street first…

For too many years, federal regulators turned a blind eye to signs of an impending financial crisis. Tricks and traps proliferated in the credit card and consumer lending industries. Predatory mortgage loans exploded, fueling an unsustainable housing bubble.

Regulators lifted rules requiring banks to keep adequate capital, and a laissez-faire approach to securitization, derivatives, and proprietary trading encouraged excessive risk-taking on Wall Street. As a member of the Board of Governors, Chair of the Council of Economic Advisers, and then ultimately as Chairman of the Board of Governors, Dr. Bernanke supported each of these decisions, failing to take the necessary precautionary steps that could have averted or mitigated financial collapse…”

Time Magazine announced that they have chosen Ben Bernanke as their “Person of the Year“… well that designation carries significant publicity and the magazine is now showing lots of color photographs of Chairman Bernanke’s personal office memento’s…

But the award of Time “Person of the Year” is described as this: “The distinction is supposed to go to the person who, for good or ill, has most affected the course of the year; it is therefore not necessarily an honor or a reward.”

I would argue that history may come to a different conclusion about whether Chairman Bernanke helped or hurt the American economy.

Keep your eyes on Sen. Richard Shelby (R-Ala.), he has been exceedingly coy about whether or not he will vote in favor of Chairman Bernanke’s reconfirmation.

The Alabama senator sees the confirmation as part of a broader, more historical effort to reform the Federal Reserve.. He and many other members of Congress have grown increasingly concerned how Wall Street is so healthy now as Main Street suffers and how the “too big to fail” banks getting grower at the expense of community banks.

All eyes on Dirksen room 538… it will be a hot Committee room!

Update from Dow Jones: Sen. John McCain (R-Ariz) says he will vote against Chairman Bernanke.

Read more: Senator-Vitter, Senator-Demint, Senator Richard Shelby, Senator-Shelby, Bernanke, Ben Bernanke Federal Reserve, Federal Reserve, Senator Jeff Merkley, Richard Shelby, Jeff Merkley, Senator Bunning, David Vitter, Senator David Vitter, Politics News

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