Outside editorial: Reconfirm Ben Bernanke

Posted: Tuesday, December 22, 2009

The following editorial appeared in the Seattle Times:

Ben Bernanke, who has been renominated as chairman of the Federal Reserve by President Obama, should be confirmed by the Senate.

Seven of the 23 votes on the Senate Banking Committee went against him, the complaint being that in 2006 and 2007 he didn't see the financial collapse ahead.

"Bernanke was as clueless as Greenspan," complained Sen. Bernie Sanders, the Vermont lefty, comparing the current chairman with his predecessor, Alan Greenspan.

That Bernanke cannot see the future ought not to be held against him. Hardly anyone predicted what was coming, and of those who did, probably none could duplicate the feat three times running. Bernanke has been a certifiable smart guy since his high-school days in Dillon, S.C., when he scored 1590 out of 1600 on his Scholastic Aptitude Test.

Bernanke, named this week by Time magazine as its Person of the Year, is an expert on the failed Fed policy of the early 1930s. In the crisis of September and October 2008, he knew enough not to make the same mistakes.

In the Bank of America-Merrill Lynch merger deal and other matters, Bernanke and Bush Treasury Secretary Henry Paulson acted much more boldly than the officials of 75 years before.

Whether theirs was the best possible rescue we do not know, but the financial system was rescued. We have issues with Wall Street, but we do not want it in ruins.

Like many, we have our worries about Bernanke. He might keep interest rates too low for too long, and blow another bubble. He might be too friendly to Wall Street, though he is not from there, as Paulson was; in his life before the Fed, he was a professor of economics at Princeton University.

When he was first appointed as chairman by President George W. Bush, there was some worry that he was an academic without real-world experience, but he certainly has that now.

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