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Bernanke reappointed but “Main Street America” is not satisfied

Friday, January 29th 2010 - 11:59 UTC
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The chairman with the Senate’s narrowest victory margin in decades The chairman with the Senate’s narrowest victory margin in decades

Ben Bernanke has been approved to serve a second four-year term as chairman of the US Federal Reserve, the country's powerful central bank. The US Senate voted 70-30 in favour of Mr Bernanke, handing him the narrowest victory margin in decades.

He has been criticised for not doing enough to prevent the economic crisis and for supporting the bank bailouts.

But his supporters say that without his efforts after the crash, the US would be in far worse shape than it is now.

US Treasury Secretary Timothy Geithner said the Senate had done the “right thing” by confirming Mr Bernanke.

“Chairman Bernanke will continue to play a vitally important role in guiding the nation's economy,” he said in a statement.

But Democratic Senator Sheldon Whitehouse said it was time the Fed used its “enormous powers” to help people.

It was time to “pivot from the necessary rescue of our major financial institutions to the equally, if not more necessary, help to America's families,” he was quoted as saying by Reuters news agency. Mr Bernanke replaced Alan Greenspan as chairman in 2006.

His nomination had earlier cleared a procedural hurdle with a 77-23 vote.

The US Federal Reserve wields considerable influence since under its charter it has the power to set interest rates which influence inflation and employment.

“A vote for Ben Bernanke is a vote for bailouts,” Republican Senator Jim Bunning said. “If you want to put an end to bailouts and send a message to Wall Street, this vote is your chance.”

Election-year politics and antipathy toward the Fed weren't the only factors driving senators to oppose a second term for Mr. Bernanke, who won confirmation four years ago on a voice vote.

Some “no” voters cited concerns about the Fed chairman's track record on regulation ahead of the financial crisis, an area in which even Bernanke has acknowledged the Fed's shortcomings. Others criticized his response to the crisis, with some liberals charging he didn't do enough for Main Street and some conservatives saying the Fed was sowing the seeds of the next crisis.

“The Fed chairman has to realize the urgency with which the big banks have been saved and bailed out,” said Democrat Sen. Maria Cantwell. “That urgency has to be applied to Main Street.”

After the procedural vote, the Senate voted 70-30 to confirm Mr. Bernanke. Some of the seven senators who switched following the procedural vote to cast votes in opposition to the nomination explained they didn't want to stand in the way of President Barack Obama's nominee, but wanted to show disapproval of Mr. Bernanke's tenure. Among those were Sen. Barbara Boxer (D., Calif.), who faces a tough re-election race, and Sen. Byron Dorgan (D., N.D.), who is retiring.

Mr. Dorgan said he wanted to highlight what he called a “bright line in America between those who are too big to fail and those who are too small to matter.”

In a brief statement from the White House, President Obama said he was gratified by the Senate’s broad bipartisan vote to confirm Ben Bernanke for another term as Chairman of the Federal Reserve.

“As the nation continues to face the consequences of the worst recession in a generation, Ben Bernanke has provided wisdom and steady leadership in the midst of the financial and economic crisis. While the worst of the storm has passed, its devastation remains and we have a lot of work to do to rebuild our economy. I congratulate him on his confirmation and look forward to working with him in the days ahead” said President Obama.

Categories: Economy, Politics, United States.

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