Confirm Bernanke

He may not be perfect but he’s the best choice for continuing on the path away from economic collapse. In a New York Times op-ed, Alan Blinder advocates support for his friend and former colleague.

[H]is job performance since, say, October 2008 has been superlative. To cite just a few examples, Mr. Bernanke led the Fed to lower its interest rates to virtually zero in December 2008 and then to hold them there. The central bank also invented approaches to lending and purchasing assets that breathed some life into moribund markets like commercial paper and mortgage-backed securities. It led the highly successful “stress tests” of 19 large financial institutions last spring.

The success of these policies is demonstrable. The simplest and most objective measures of financial distress are the differences, or “spreads,” between various (risky) interest rates and the corresponding (risk-free) Treasury rates. During the worst of the crisis, in September to November 2008 and again in February to March 2009, these spreads skyrocketed to dizzying heights. Since then, they have fallen remarkably, providing direct evidence that the Fed’s cure is working.

If the Senate fails to confirm Bernanke, it will further politicize the Fed and disrupt the growing confidence in the financial markets that underpin a healthy economy. People who expect instant gratification and instant recovery from one of the worst potential recessions in modern global history shouldn’t be given the encouragement that is better placed with the leaders our precarious recovery.

[update]: Senate Confirms Bernanke 7030. That is a lot of no votes but the important thing is he was reappointed.

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