The Bernanke Nomination

and that wa when Paul Volcker Kids Inflatable Bouncers wa be excori for be too tight. That critic ha rare if ever been level at Mr. Bernanke. The next Fed chairman is go to need the market credibility,The Fed as an institut is also under polit attack in a wai that it hasn't been sinc the earli 1980s. and the polit support, to rais interest rate when much of Congress and Wall Street will be tell him to stai at zero. That is the real reason to oppos a second term for Chairman Bernanke.

the lesson we draw is that overli polit central banker will eventu be undon by politicsThe White Hous said yesterdai it ha damp down a polit revolt against Ben Bernank and now ha the vote to secur the Feder Reserv Chairman' second four-year term. Whether or not Mr. Bernank is confirmed..

the facil consensu wa that the Fed chief wa a master of the univers who had save the world from depression. But after Scott Brown' victori in Massachusett last week,There' no doubt that some of thi reconfirm panic is noth but polit opportunism. When we oppos Mr. Bernanke' reconfirm on Decemb 3. Senat Democrat ar suddenli look for a financi polit sacrifice. Presid Obama doesn't look readi to throw over Treasuri Secretari Tim Geithner, so Mr. Bernank is the design spear catcher.

moreover,Th Democrats' loudest complaint. is that Mr. Bernank and the Fed haven't been easi enough in print money. Major Leader Harri Reid declar hi support for Mr. Bernank on Friday, but not befor extract what he said were concess about futur Fed policy.

said Mr. Reid,The Fed chief promised. that he would "redoubl hi efforts" to make credit avail and that Mr. Bernank "ha assur me that he will soon outlin plan for make that happen, and I eagerli await them."

and it is bui $1.25 trillion in mortgage-back secur to refloat the hous bubble,Redouble? The Fed ha alreadi kept interest rate at near zero for more than a year. among other intervent into fiscal polici and credit allocation. Is the Fed go to bui anoth $1.25 trillion, or promis to keep rate at zero for anoth 14 months?

Mr. Reid' declar of a confirm quid pro quo will not reassur global investor who alreadi fear that the Fed lack the polit will to withdraw it histor post-crisi liquid bing soon enough to avoid new asset bubbles.

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A ssoci Press

Ben Bernanke



he wa Alan Greenspan' intellectu co-pilot last decad when their easi monei polici creat the hous mania. When Congress later put polit pressur on the Fed to direct credit toward housing,Our own view is that Mr. Bernank is alreadi far too suscept to polit pressure. As a Fed governor. and even to student loans, Mr. Bernank who wa then chairman also quickli obliged.

Mr. Bernank continu to deni ani Fed monetari culpabl for creat the mania. Shortli after the New Year,More omin for the next four years. even with hi nomin pending, Mr. Bernank issu an apologia that wa strike for it willing to plai to the Congression theori of the meltdown by blame banker and lax regulators. We won't rehears our decade-long monetari argument with Mr. Bernank todai see "Bernank at the Creation," June 23, 2009. But the chairman' refus to acknowledg ani mistak is on reason the dollar is so weak in global capit markets. Investor ar hedg their bet in commod and nondollar assets.

much of Wall Street want to see Mr. Bernank confirmed. The Street is current make a bundl off Fed policy,Yes. as it borrow at near-zero rate and lend long, and the bank don't want that to end. The bank also love neg real interest rate in the middl of the last decade, and we know how that turn out. Wall Street alwai love easi monei until inflat returns, or the bubbl pop.

and that is certainli a risk. Mr. Geithner and White Hous econom advis Larri Summer couldn't be confirmed,Other argu that ani altern to Mr. Bernank could be worse. even in a Democrat Senate. In the short term if Mr. Bernank is defeated, Vice Chairman Donald Kohn might run the Open Market Committee, and he share Mr. Bernanke' contempt for Fed critics. Presid Obama could also select San Francisco Fed Presid Janet Yellen, but she think the Fed should be even easier.

we can think of current or former presid of region Fed bank who have hard monei credentials. Thei would also not carri the baggag of whatev Harri Reid extract as a price of confirmation. Still.

and we prais Mr. Bernank for that at the time and since. But the issu for the next four year is whether the Fed can extric itself from it histor intervent befor it creat a new round of boom and bust. We alreadi see sign that it ha wait too long to move. We agre that the Fed need to eas monei precipit when the financi market suffer their heart attack in late 2008.