Senator Bernie Sanders has put a hold on the nomination of Ben Bernanke for Federal Reserve Chair:
WASHINGTON, December 2 – Sen. Bernie Sanders (I-Vt.) today placed a hold on the nomination of Ben Bernanke for a second term as chairman of the Federal Reserve.
“The American people overwhelmingly voted last year for a change in our national priorities to put the interests of ordinary people ahead of the greed of Wall Street and the wealthy few,” Sanders said. “What the American people did not bargain for was another four years for one of the key architects of the Bush economy.”
As head of the central bank since 2006, Bernanke could have demanded that Wall Street provide adequate credit to small and medium-sized businesses to create decent-paying jobs in a productive economy, but he did not.
He could have insisted that large bailed-out banks end the usurious practice of charging interest rates of 30 percent or more on credit cards, but he did not.
He could have broken up too-big-to-fail financial institutions that took Federal Reserve assistance, but he did not.
He could have revealed which banks took more than $2 trillion in taxpayer-backed secret loans, but he did not.
“The American people want a new direction on Wall Street and at the Fed. They do not want as chairman someone who has been part of the problem and who has been responsible for many of the enormous difficulties that we are now experiencing,” Sanders said. “It’s time for a change at the Fed.”
The Federal Reserve has four main responsibilities: to conduct monetary policy in a way that leads to maximum employment and stable prices; to maintain the safety and soundness of financial institutions; to contain systemic risk in financial markets; and to protect consumers against deceptive and unfair financial products.
Wow. Senator Sanders is dead on about more than a few things here, the biggest one that pops out is how the American people did indeed vote for change and not a scenario which is looking more and more like a continuation of the Bush administration.
Sanders goes on:
Under Bernanke's watch, the value of risky derivatives held at our nation's top commercial banks grew from $110 trillion to more than $290 trillion, 95 percent of which are concentrated in just five financial institutions.
Bernanke failed to prevent banks from issuing deceptive and unfair financial products to consumers. Under his leadership, mortgage lenders were allowed to issue predatory loans they knew consumers could not afford to repay. This risky practice was allowed to continue long after the FBI warned in 2004 of an "epidemic" in mortgage fraud.
After the financial crisis hit, Bernanke's response was to provide trillions of dollars in virtually zero-interest loans and other taxpayer assistance to some of the largest financial institutions in the world. Adding insult to injury, Bernanke refused to tell the American people the names of the institutions that received this handout or the terms involved.
This means that the Senate must obtain 60 votes, instead of just 50 to confirm, to remove Senator Sander's hold and let the actual confirmation vote proceed.
While the major press are still claiming this is a done deal for Bernanke to be confirmed, I would say not so fast. There is enormous Populist outrage on the TARP, the executive pay and for those who have been following, derivatives and AIG.
Another political maneuver will be the ability to gain more air time, press to make the people aware of some of these Federal Foibles.
The issue really is if not Bernanke, then who? (see my 2¢ in Burning Ben). To spell out my concern more explicitly, there are rumors Larry Summers wishes to be the Federal Reserve chair and if Bernanke is out, lord help us if Summers obtains the position.