President Obama plans to nominate Federal Reserve Chairman Ben Bernanke to a second term, giving a vote of confidence to a key member of his economic team as the government continues its efforts to stabilize the country’s fragile economy, The WSJ reported late Monday.
The Federal Reserve chief, who has literally rewritten the book on central banking in the past year by aggressively cutting interest rates, significantly expanding the Fed’s balance sheet, and injecting astronomical sums of money into the financial system to fight a worsening financial crisis, is expected to join the President for the announcement of his renomination at an event in Martha’s Vineyard on Tuesday.
The new development suggest that President Obama feels the general course of economic policy is on the right track, thus the reappointment.
In remarks prepared for delivery on Tuesday, the president — according to Reuters, will say “The man next to me, Ben Bernanke, has led the Fed through one of the worst financial crises that this nation and this world have ever faced..[His] bold action and outside-the-box thinking …has helped put the brakes on our economic freefall.”
Obama will also say in his statement, “As an expert on the causes of the Great Depression, I’m sure Ben never imagined that he would be part of a team responsible for preventing another, but because of his background, his temperament, his courage, and his creativity, that’s exactly what he has helped to achieve. And that is why I am reappointing him to another term as Chairman of the Federal Reserve.”
We couldn’t agree more with Obama’s decision. As we have previously argued, while Mr. Bernanke certainly failed to see the risks building in both the housing market bubble and the financial sector prior to the crisis, he deserves all the credit for bringing the US economy back from the brink of collapse last Autumn, and for navigating the financial system through its worst shock since the Great Depression. And may we say – considering the circumstances, he did it brilliantly.
There had been speculation in recent months as to whether Bernanke would be nominated for another four-year term at the helm of the Fed. According to analysts, the early move by Obama — before Bernanke’s term ended on Jan. 31, ’10 — would stop any lingering worries about who might lead the Fed as the economy bounces back.
Bernanke’s nomination for a second four-year term starting Jan. 31 requires Senate approval.
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