But White House reiterates its support of Fed chief for a second term Pfffttttt
msnbc.com staff and news service reports
updated 12:29 p.m. CT, Fri., Jan. 22, 2010

Federal Reserve Chairman Ben Bernanke's confirmation for a second term received another body blow on Friday when two key Democrats said they would be opposed to letting him continue to steer the economy through the financial crisis.

The growing chorus of opposition to Bernanke, 56, among Democrats prompted the White House to restate its support of the chairman, who began his term under Republican President George W. Bush. It ends on Jan. 31.

A date for a Senate vote on his renomination has not been set.

Senator Barbara Boxer of California released a statement Friday that said she thought it was time for a change at the helm of the nation's central bank.

"I have a lot of respect for Federal Reserve Chairman Ben Bernanke. When the financial crisis hit in late 2008, he took some important steps to prevent what many economists believe could have been an even greater economic catastrophe," Boxer's statement said.

"However, it is time for a change — it is time for Main Street to have a champion at the Fed," she added.

Boxer laid some of the blame for the worst economic crisis since the Great Depression at Bernanke's feet, saying that he was instrumental in some of the policies that led to the recession.

"Our next Federal Reserve Chairman must represent a clean break from the failed policies of the past," Boxer said.

Senator Russ Feingold of Wisconsin also said he would vote against Bernanke. The vote could come as soon as next week.

Feingold and Boxer join Sen. Byron Dorgan (D-N.D.), who on Thursday said he was not prepared yet to vote for Bernanke unless the Fed released information on loans it made to commercial banks in 2008, when the subprime mortgage crisis was in full bloom.

The White House said Friday it believed Bernanke will win another term despite senators' hesitation over his willingness to discuss what steps the central bank will take to add much-needed jobs.

Deputy Press Secretary Bill Burton told reporters as they were traveling with Obama to Ohio that the White House has "a great deal of confidence" in the steps Bernanke has already taken and he is "the best person for the job."

Burton also said the White House still is working to get Bernanke confirmed and there's no backup plan.

If Bernanke is not confirmed before his term expires, Fed Vice Chairman Donald Kohn would probably step in as chairman and run the central bank on a temporary basis.

Just days after losing their filibuster-proof Senate majority in a Massachusetts special election, Senate Democrats are searching for a way to defuse voter anger that the economy remains sluggish and is recovering slowly from a recession that was as harsh as any in decades.

While praised for preventing the Great Recession from turning into the Great Depression, Bernanke's support of Wall Street bailouts — especially the $182 billion rescue of insurance giant American International Group Inc. — has touched a nerve on Main Street.

Bernanke and Sen. Majority Leader Harry Reid, D-Nev., met Thursday to discuss ways to strengthen the economy, encourage more lending by banks and curb home foreclosures. Reid has been conspicuously quiet about where he stands.

Senate Democrats are scrambling to do head counts.

Don Stewart, spokesman for Sen. Republican Leader Mitch McConnell of Kentucky, said that Democrats had asked GOP leaders to do a whip count to measure support among Republicans. "We didn't think we'd even have to count," Stewart said. You BUFFOONS!!!!!

Illustrating Bernanke's difficulties in the Senate, Sen. Bob Corker, R-Tenn., one of four Republicans to vote for his nomination in the Senate Banking Committee, said Friday he was undecided on how to vote on final confirmation.

"The whole AIG issue — you'd have to be asleep not to know that that has certainly clouded the issue," he said in an interview with The Associated Press.

Corker said he has spoken to Bernanke a number of times over the past week, has reviewed Fed documents and reread Bernanke speeches. He said a strong argument for Bernanke is that he is best equipped to mop up massive amounts of money pumped into the economy during the crisis to avert another dangerous problem: an outbreak of inflation.

"On the other hand, at some point you have to weigh that against the fact that regardless of what he's done, even if everything he's done has been perfect, you've got to understand that trust that the public has in the Fed today has been greatly diminished by the activities that have taken place over the last couple of years."

"At this point I just want to say I'm continuing to do all the due diligence that I can," Corker said.

Dissatisfied by the bailouts, Sen. Bernie Sanders, an independent liberal from Vermont, wants to block Bernanke's confirmation with a filibuster on the Senate floor. He has placed a "hold" on the nomination, meaning it will require a super-majority of 60 votes to confirm Bernanke.

The Senate Banking Committee in mid-December sent Bernanke's nomination to the Senate floor on a 16-7 vote. Six Republicans and one Democrat lined up against him.

http://www.msnbc.msn.com/id/35012027/ns/business-stocks_and_economy/

Is Bernanke Hiding A Smoking Gun?
Posted: 01-26-10 05:17 PM
A Republican senator said Tuesday that documents showing Federal Reserve Board Chairman Ben Bernake covered up the fact that his staff recommended he not bailout AIG are being kept from the public. And a House Republican charged that a whistleblower had alerted Congress to specific documents provide "troubling details" of Bernanke's role in the AIG bailout.

Sen. Jim Bunning (R-Ky.), a Bernanke critic, said on CNBC that he has seen documents showing that Bernanke overruled such a recommendation. If that's the case, it raises questions about whether bailing out AIG was actually necessary, and what Bernanke's motives were.

A letter Bunning sent Monday to Banking Committee Chairman Chris Dodd (D-Conn.) also refers to an "[e]mail exchange regarding restructuring of assistance to AIG, initiated by Treasury Secretary Timothy Geithner" in March 2009.

Senators will be voting on Bernanke's confirmation for a second term in the coming days. But only senators on the Banking Committee have had access to documents that illuminate just what decisions he made and how he made them. And that access only came after Bunning publicly complained that Dodd and Sen. Richard Shelby (R-Ala.) were the only members of the committee could see them.

Meanwhile, Rep. Darrell Issa (R-Calif.), who has been investigating the AIG bailout in his role as ranking Republican on the House Oversight and Government Reform Committee, said that a whistleblower has informed him of "troubling details" of Bernanke's role in the bailout.

There may be nothing incriminating in the documents, but without access to them, the Senate will be voting to confirm him in the dark.

Senators from both parties who say they will vote to confirm Bernanke credit him with deft actions that averted a second Great Depression. Those actions, they argue, outweigh what blame he deserves for causing the crisis in the first place.

"He's done a very good job in the last year. And but for his work, we would be in a very different position in this country today," said Dodd Monday. "Now that's hard to prove a negative. But the fact of the matter is, our entire financial system might have collapsed but for his leadership."

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On Monday, Bunning sent a letter to Dodd, asking him to subpoena the emails and other documents. Bunning and other committee members have thus far had to view the documents at the Federal Reserve and are bound by confidentiality from revealing their contents. "He thinks that all members of the Senate should have access to the documents he's seen," said Bunning spokesman Mike Reynard.

Issa, in a letter to his committee's chairman, Ed Towns (D-N.Y.), asked for a similar subpoena and even specified exactly which documents he wants: Those tagged electronically as "sb-aig-01000092 to sb-aig-010000125" and "Draft Memo on AIG.pdf."

Towns spokeswoman Jenny Rosenberg said that Towns would decide on a subpoena after Wednesday's hearing on the AIG bailout.

Bunning, in his letter to Dodd, is equally specific, citing nine particular documents that the Senate should review before voting to confirm Bernanke:



1. Agenda and materials for 11/12/2008 meeting of the Board of Directors of AIG (containing minutes of previous board meetings). [AIG_11.12.08_BOD.pdf]

2. Agenda and materials for 1/14/2009 meeting of the Board of Directors of AIG (containing minutes of previous board meetings). [AIG_01.14.09_BOD.pdf]

3. Memo "Issues Related to Possible IPC Lending to American International Group" presented to the Board of Governors for approval of lending to AIG, dated 9/15/2008. [pages sb-aig-01000092 to sb-aig-01000125]

4. Email from Chairman Bernanke including a draft of the memo to be presented to the Board of Governors for approval of lending to AIG, dated 9/15/2008. [Draft Memo on AIG.pdf]

5. Memo "Proposed Securities Lending Facility for American International Group, Inc. ("AIG")" presented to the Board of Governors for approval of the securities lending facility for AIG, dated 10/6/2008. [Board Mtg_10-6-2008_8.35.05_AM.pdf]

6. Memo "Proposed Steps to Stabilize American International Group, Inc." presented to the Board of Governors for approval of restructuring assistance to AIG and creation of Maiden Lane II & III, dated 11/6/2008. [AIG restructuring Board memo Final (Nov. 6, 2008)_11-6-2008_4.55.19_PM.pdf]

7. Spreadsheet describing the assets purchased by Maiden Lane II and Maiden Lane III. [BLK_12.31.08_MLII & III cusip data.xls]

8. Spreadsheet listing derivative transactions and counterparties for Maiden Lane III. [List of Derivative Transactions.pdf]

9. Email exchange regarding restructuring of assistance to AIG, initiated by Treasury Secretary Timothy Geithner, dated 03/01/2009. [AIG Emails, Part3.pdf]

http://www.huffingtonpost.com/2010/01/26/is-bernanke-hiding-a-smok_n_437509.html

Bernanke gets a second term
By Jennifer Liberto, senior writerJanuary 28, 2010: 4:27 PM ET


WASHINGTON (CNNMoney.com) -- Federal Reserve Chairman Ben Bernanke was confirmed for a second term Thursday by the U.S. Senate.

The final confirmation vote was 70-30. Minutes earlier, more than enough senators, 77, voted to end a filibuster on the nomination in a procedural move that required 60 votes. Most in history to ever vote no!

The vote, which occurred just three days before Bernanke's first term was scheduled to end, came after heavy lobbying by Democratic leaders and the Obama administration. President Obama, himself, made calls last weekend. And Senate Majority Leader Harry Reid, D-Nev., lobbied Republicans to make sure he had enough votes.

Despite the strong showing, Bernanke won his confirmation by one of the smallest margins of all time for a Fed chairman. Often the confirmation of a Fed chairman is so overwhelming and uncontroversial, it's done by a voice vote.

In 1983, then-chairman Paul Volcker was confirmed for a second term by a vote of 84-16, considered one of the more controversial confirmation votes at the time. Bernanke's second-term vote was far slimmer.

The controversy came through in the debate, which grew impassioned on both sides.

"This is not some assistant undersecretary of some other agency, this is the central bank chairman of the most important central bank in the world," Sen. Christopher Dodd, D-Conn., said in the last speech of the day on the issue. "It's a critically important component in continuing our path to economic recovery. We will bear the collective responsibility of failing to meet that obligation if we walk away. . . by continuing this filibuster or defeating this nominee."

But several Republicans and Democrats countered that Bernanke deserves much of the blame for the current economic situation.

"Our present economic problems are no accident," said Sen. Richard Shelby, R-Ala., a key lawmaker who works with Dodd on financial legislation. "Dr. Bernanke's Federal Reserve played a key role in setting the stage for the financial crisis we're in now."

Several senators, including Sen. Barbara Boxer, D-Calif., Sen. Sheldon Whitehouse, D-R.I., and Sen. George LeMieux, R-Fla., voted to end the filibuster blocking the confirmation vote but then voted against Bernanke's second term.

"He sat there, and said everything was fine. Everything was fine and everything was wonderful. Everything was OK," said Boxer, who is up for re-election this fall. "If Mr. Bernanke is confirmed, and I expect he will be, I hope he will listen to what a lot of us are saying here, and turn his attention to Main Street."

The Bernanke vote was a particularly tough one for the Senate.

The Senate is sensitive to growing voter frustration that Washington did a better job getting Wall Street back on its feet than Main Street.

Bernanke is largely seen as a symbol of Wall Street, even though many credit him for saving the economy from falling into a second Great Depression.

At least a half dozen Democrats, including several up for re-election this November, voted no on Bernanke. But the vote garnered some Republican support.

"The past decade was the worst decade in modern times," Sen. Bernie Sanders, an independent from Vermont who votes with the Democrats, said on the Senate floor. He is among a handful of senators from both parties who delayed Bernanke's confirmation.

"Why do you want to re-appoint somebody who not only failed at his job as chairman of the Fed, in terms of safety and soundness, but was the author the Bush economy?" Sanders asked. OHHHHH YEA YAH!

http://money.cnn.com/2010/01/28/news/economy/bernanke_confirmation_vote/index.htm?hpt=T2