Fed Chairman Ben Bernanke, once considered a shoo-in for another term, is apparently in trouble in the Senate. A filibuster has been threatened, and Harry Reid says he not certain he has the 60 votes needed to bring Bernanke’s confirmation up for a vote by the Jan. 31 deadline.
Personally, I think Bernanke’s critics and defenders are both correct. Prior to the housing bust, Bernanke failed to heed the signals of impending trouble and in fact took steps that in hindsight contributed to the problem. But once the scope of the crisis became apparent, Bernanke acted decisively and effectively in cobbling together a plan to contain the damage.
So I’m torn on whether he should be reconfirmed. But as Politico warns, the folks on Wall Street are insistent Bernanke remain:
On Wall Street, executives predicted a dire market reaction if Bernanke’s confirmation fails. “A decision to kill the Bernanke nomination will cause a large and disturbing upset in global financial markets,” said economist Joseph Brusuelas. “Not just equities, but the dollar and interest rates will be immediately impacted.”
Wall Street lobbyists in Washington said they were quietly making the case for Bernanke on Capitol Hill, but were hamstrung by the politics. Because Bernanke has been criticized as too close to Wall Street, they said, the surest way to seal his fate would be for financial lobbyists to make a full court press to save his nomination.
“Three months ago, we thought this was a slam dunk,” said one financial services executive. “And today people think this may not even be a layup. There’s lots of concern in the markets that the politics of the Senate might derail him.”
Of course, that Wall Street support is part of Bernanke’s problem in the first place.