On Grilling the Fed Chair Ben Bernanke

I got a bit angry at accounts of the latest appearance of Federal Reserve Chair Ben Bernanke before the U.S. Congress.

The Wall Street Journal reports:

Bernanke faced open hostility from lawmakers who barraged him during a Congressional hearing over his handling of the financial crisis and the central bank’s role in reshaping the banking system.

Setting aside the deferential tone usually reserved for Fed chairmen, members of the House Committee on Oversight and Government Reform repeatedly interrupted Mr. Bernanke at Thursday’s hearing to review the Fed’s role in engineering a government aid package for Bank of America Corp. The lawmakers pored over internal Fed emails subpoenaed by the committee and projected on a screen in the hearing room.

It is one thing to have different views from those of the Fed Chair on particular decisions that have been made– I certainly have plenty of areas of disagreement of my own. But it is another matter to question Bernanke’s intellect or personal integrity. As someone who’s known him for 25 years, I would place him above 99.9% of those recently in power in Washington on the integrity dimension, not to mention IQ. His actions over the past two years have been guided by one and only one motive, that being to minimize the harm caused to ordinary people by the financial turmoil. Whether you agree or disagree with all the steps he’s taken, let’s start with an understanding that that’s been his overriding goal.

These interrogations reveal more about those doing the grilling than they reveal about Bernanke. I see this as pure political theater, and I don’t like it.

If Congress wants to explore more usefully the wisdom and motives behind some of the decisions that have been made, it might want to investigate why some legislators are now pushing for Fannie and Freddie to guarantee a riskier category of mortgage condo loans.

On grilling the Fed Chair

About James D. Hamilton 244 Articles

James D. Hamilton is Professor of Economics at the University of California, San Diego.

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1 Comment on On Grilling the Fed Chair Ben Bernanke

  1. I couldn’t agree more.

    Bernanke (like Greenspan and Volcker) has clearly demonstrated time and again that intellectualism has trumped all other factors in his decision-making.

    You wouldn’t even know he was a Republican from his finely-tuned technocratic way of ruling, his detailed and nuanced manner of reasoning, his embrace of the evidence for both Keynesianism and Monetarism,…really his way of looking at the world in shades of gray rather than the simplistic black and white modes of thinking championed by the Palin’s, the George W. Bush’s, and most other Republicans leaders today.

    He is probably my favorite Republican in America today–one of the few dispassionate, thinking ones left.

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