So the Democrats in Massachusetts provide the world with another unlikeable, dull politician (list of Massachusetts’ Democrats whom I don’t want to have a beer with: Kerry, John; Dukakis, Michael; Affleck, Ben) and manage to lose Ted Kennedy’s ancient senate seat. The fallout from this is probably overblown, and there is no need for me to go into depth about why since it’s been talked about in pretty great length. The thing I find interesting is how this affects Mr. Bernanke’s reconfirmation.
It seems as though Bernanke will pass the Senate, but not without getting dragged through the mud first. (To the left I have an image of what Bernanke will experience.) Senators of both parties will point out how Bernanke failed to predict the financial crisis and how he has made many other mistakes. Despite these just criticisms Bernanke will pass and for one reason: where are you going to find someone better than Bernanke?
Paul Krugman has talked about this on his blog and mentions the idea of Paul Volcker taking his old position back. But Krugman essentially admits that he has no clue what Volcker would do differently policy-wise. At the end of the day, what is the Senate gonna do? Not pass Bernanke? Then what? Obama nominates someone else who has less impressive credentials and follows the same ideology as Bernanke and the senate passes him for the sake of change.
If the Senate wants to influence the economy, get Bernanke in and out as quickly as you can and pass Barney Frank’s finance reform. If you have issues with the Federal Reserve, pass Dr. Paul’s bill allowing Congress to audit the Federal Reserve. Criticizing Bernanke if you have no other realistic options is just a waste of energy. If Bernanke is capable of learning a lesson, he learned it some time ago.
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