President Barack Obama nominated Ben Bernanke on August 25 to serve a second term as Federal Reserve chairman, the nation’s top economic policymaker. Obama praised Bernanke for helping the U.S. and world economy avoid another depression. The Fed chairman, who built his academic career as a top scholar on the Great Depression, enjoys near-unanimous support among mainstream economists. They credit him with effectively stabilizing the economy and easing the credit crisis.
Under Bernanke’s direction, the Fed lowered interest rates to near zero and injected hundreds of billions of dollars into the economy. Future challenges for Bernanke include how to scale back the central bank’s extraordinary interventions and increase interest rates without spurring a new period of inflation. A Republican appointed in 2006 by President George W. Bush, he is widely seen as independent from politics; this trait should help him confront the impact of rising federal budget deficits.
Bank failures, foreclosures, and unemployment are still on the rise, but Bernanke’s confirmation by the Senate is expected. But as Congress debates a proposed overhaul of financial regulations, including an expanded role for the Fed, criticism of Bernanke will be heard. Some critics claim he was either too slow to recognize the threat to the financial system or too frantic in his efforts to rescue it. Many Republicans object that so much taxpayer money has been put at risk in propping up shaky financial firms. And some Democrats are angry that aid to banks took priority over aid to homeowners or struggling borrowers.
Related Links
- Obama to Reappoint Bernanke as Fed Chief
This article from the Wall Street Journal reviews the challenges Ben Bernanke has faced, and will face in his second term, as head of the Federal Reserve.(Source: Wall Street Journal, August 25, 2009) - Obama Renominates Bernanke as Fed Chief
This Reuters article discusses President Obama’s renomination of Ben Bernanke to continue leading the Federal Reserve in ongoing difficult economic times.(Source: Reuters, August 25, 2009) - Obama Names Bernanke for 2nd Term
This Washington Post article predicts a difficult confirmation process for Ben Bernanke before he assumes a second term at the Fed.(Source: Washington Post, August 26, 2009) - FED 101: The Federal Reserve Today
This Web site takes visitors on an interactive journey through the Federal Reserve’s history, monetary policy, regulatory functions, and financial services; includes link to a biography of Ben S. Bernanke.(Source: federalreserve.gov; accessed August 31, 2009)