I was able to catch a big part of the confirmation hearing yesterday of Ben Bernanke for his second term as Fed chief. As expected, there were repetitions of the point relating to the failure of the central bank to predict and prevent the crisis, to which Bernanke admitted mistakes had been made. That said, he also defended himself by saying he nevertheles managed to reduce the catastrophic effects of the crisis, preventing a second Great Depression from happening.
I thought another interesting part of the hearing was Sen. Bunning’s spiel. I don’t recall hearing him ask a question to the chief, but simply emphasizing that he was the only one who voted against Ben to be given the post the first time, and how he is yet again opposing giving him a second term. The senator saw Bernanke as merely someone who would continue Greenspan’s legacy. He said he didn’t know how right he would be.
Despite that, Sen. Dodd supported Bernanke’s reappointment saying he’s the right person for the job at times like this in the US economic history while still suggesting reduced power for the central bank. Bernanke does not have problems with transparency but he is worried that intervention from government agencies could impose pressure on the Fed’s moves, tainting policy actions with political motives.