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Later this morning, Ben Bernanke begins the uncomfortable process of trying to convince lawmakers that he deserves a second term as Fed chairman. He is widely expected to be confirmed. But the hurdle got a little higher yesterday, when Vermont Sen. Bernie Sanders (I., Vt.) threatened to hold up a vote on the Senate floor of the confirmation. If Mr. Sanders follows-through with his threat, Mr. Bernanke would need 60 votes to overcome the block and be confirmed. It's not clear Mr. Sanders will carry out the threat, and it looks like Mr. Bernanke will get the votes he needs even if Mr. Sanders does carry out the threat. But nothing is certain these days. A year ago, very few political observers would have imagined that Rep. Ron Paul (R., Texas) could have generated a powerful majority of support for a bill to audit Fed policy.
Tom Gallagher, a savvy economic policy analyst with the ISI Group, notes that the other magic number for Mr. Bernanke is 16. That's how many 'no' votes were tallied against Paul Volcker when he was up for a second term at the Fed in 1983, the most in any confirmation vote for a Fed chairman in the Senate in the past 30 years. Alan Greenspan — who was largely pampered by lawmakers when he was Fed chairman but is now the object of growing ridicule for low-interest rate and hands-off regulatory policies, never got more than seven 'no' votes.
As Mr. Gallagher notes, Mr. Bernanke is almost certainly going to top that number of 16 'no' votes, another shot at the prestige of the Fed chairmanship, and a challenge for Mr. Bernanke as he enters a very difficult period. Lawmakers want to curtail the Fed's powers and increase oversight of the central bank. Mr. Bernanke needs all of the authority he can muster to keep the Fed itself from emerging from the crisis a weakened institution. (Though some would argue it should be weakened.) Moreover, the Fed could be forced to make tough decisions about raising interest rates some time next year (more likely later than sooner), something that is bound to be unpopular on Capitol Hill.
Here's how past Senate confirmation votes on Fed chairmen have played out, courtesy of ISI: Volcker 1979 98-0 in favor Volcker 1983 84-16 in favor Greenspan 1987 91-2 in favor Greenspan 1992 approved by unanimous consent Greenspan 1996 91-7 in favor Greenspan 2000 89-4 in favor Greenspan 2004 voice vote in favor Bernanke 2006 voice vote in favor
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I hear that Obama is considering Damien “Football” Williams for the job.
Ron Paul is our only hope for the United States. I just wish more Americans would understand how important it is that they learn how history and end the fed for our kids future and freedom
Ditto to all the above
Kick Bernanke to the curb. The Fed has been supporting big banking interests over the well being of the people for too long.
Ron Paul has been correct for decades. Most of us are now realizing this. Our foreign policy is and will swing his way as well. Why, it all comes down to the not-so-mighty dollar. We really need to audit the Federal Reserve. It may uncover the truth and send the economy deeper into ruin, but the truth is owed to us. Besides the sooner the economy resets, the sooner we as Americans build something viable long term. With dollar hegemony on the cliff soon to fall over, the economy as it stands can hardly be considered safe and solvent.
Real Time Economics offers exclusive news, analysis and commentary on the economy, Federal Reserve policy and economics. The Wall Street Journal's Phil Izzo and Sudeep Reddy are the lead writers, with contributions from other Journal reporters and editors. Send news items, comments and questions to realtimeeconomics@wsj.com. Read more Economics coverage.
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