Bernanke Rage
Discussion has been ramping up this week over the Federal Reserve, as Ben Bernanke’s confirmation for another term as Chair begins. Progressive superhero Bernie Sanders has put a hold on the nomination, while our own Senator Dodd is apparently the point man for ensuring the confirmation goes smoothly.
Bernanke and many supporters appear to be claiming that politicizing the Fed’s policies in the context of the confirmation would undermine the independence of the Federal Reserve; Dodd seems to be leaning on the idea that the Fed has done a great job, and that it’s simply the regulatory system that needs updating.
I’m torn on the subject – while there’s been some fascinating left-right alliances forming, I can’t help but think there’s a tension between the differing philosophies, and I’ve seen progressives burnt by one or two of our own acting as “beards” for extreme conservative interests enough times to hesitate before jumping in.
It’s absolutely true that Bernanke has not done many of the beneficial things that it is in his power to do. The most persuasive criticism is that he has pursued the well-being of banking and trading institutions over the Fed’s stated policy of pursuing full employment. Put another way, we gave the money to the wrong people – stocks are up, and jobs are down. The big-picture critique from the left might be that the actions taken to stabilize the economy have only served to perpetuate the mugging of the poor and middle class by organized wealth, and that the current policy reinforces the offensive “trickle-down” theory of economic well-being at the same time that it illustrates “trickle-down’s” ultimate failure.
However, it seems to me that hanging some bureaucrat lets the people that really screwed the economy off the hook, and would serve those who want to eliminate government regulation entirely. Remember the argument from last fall that promoting minority homeownership caused the entire collapse of the American economy? I think the hard right – the Grover Norquists of the world – has understood from the first whisper of the word “collapse” that by the end of the day the public would demand a pound of flesh for all the suffering generated by these financial institutions, and I think they’re right. The thing is, they’ve been casting around for one that lets the traders and the idle billionaires that love them get off unmolested, and Bernanke is just the latest.
Of course, Dodd is right that the regulatory regime isn’t strong enough, but doesn’t seem to get that there’s something that isn’t being satisfied out here in the wilderness of public opinion. That doesn’t mean that he should kick over the podium and strangle Bernanke on the Senate floor – but being nice, being fair, and delivering a speech about how he supports this nominee and their independence without reservation (with some toughness down in the twenty-fourth paragraph) is not doing the job of communicating that our Senator is as unhappy as we are. (If you didn’t read it from the link above, here it is again: Dodd Supports Bernanke’s Confirmation, Calls for Improvements to the Federal Reserve).
It’s frustrating, since all the conditions for an epic shift in national priorities have been in place for a couple of years now: between Iraq, Katrina, and the financial sector meltdown, Americans seem to have gotten exactly how ruinous conservative policies are for our country. With Afghanistan, the ever-shrinking healthcare reform plan, and the sustained practice of treating criminals like princelings so long as they work south of Chambers, the Change We Need is not looking very much like the Change We Wanted in the First Place. When progressive activists start lining up behind initiatives from the Americans for Tax Reform, there’s some real trouble brewing – to me, that says that our ability to believe there’s real reform around the corner is just about exhausted.