Bernanke's Confimation Woes

The chairman of the Federal Reserve Board of Governors is up for re-confirmation in the Senate. Public support for Bernanke has eroded as voters associate him with the bailouts of major banks. Many Democrats are hesitant to publicly support him since they want to appear concerned about voters in an election year. The White House however desperately needs a win for Obama's nomination because many see it as a referendum on Obama's economic policies. Obama is applying all the pressure he can to Senate democrats. This could be another embarrassing failure for Obama if he fails to sway enough Senators to secure the necessary votes.

This vote could have dramatic consequences for the economy as the current easy money policies of the fed run the risk of re-igniting inflation. This could damage the fragile recovery because inflation is notoriously hard to kill once it starts climbing. Bernanke has shown too much concern for preventing a depression and too much willingness to lend money to any institution that comes calling to have any credibility as an inflation fighter. In the game of inflation fighting credibility is often as important (maybe more important) than actual efforts to curb inflation. We can only hope our elected officials will listen to public opinion - but of course they almost never do.