Fed Chairman Ben Bernanke's Contentious Confirmation
Feb. 4, 2010
Isaac Cohen, for HispanicBusiness.com
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While the confirmation of Chairman Ben Bernanke last week for another four-year term indicates continuity in economic policy, it also was very controversial.
As the date approached, Chairman Bernanke's confirmation by the Senate became controversial. To the point that he was confirmed by a vote of 70-30, the biggest opposition ever registered in 96 years of Federal Reserve history. 18 Republicans, 11 Democrats and 1 Independent voted against.
Critics argued that, as member of the Federal Reserve Board, from 2002 to 2005, Chairman Bernanke supported the loose monetary policies that inflated the housing bubble. Starting in 2006, the objection was that, as Chairman of the Board, he did not do much to prevent the bursting of the bubble. For these reasons, some voiced concern about Chairman Bernanke's disposition to fight inflation.
By contrast, supporters highlighted Chairman Bernanke's academic credentials, as a student of the Great Depression, while praising the creative measures adopted by the Federal Reserve, under his watch, to avoid another Great Depression.
Be it as it may, the biggest challenge for Chairman Bernanke lies ahead. With unemployment still at the two digit threshold of 10 percent, the U.S. economy experienced a vigorous rate of growth of 5.7 percent, during last year's fourth quarter, and 2.2 percent during the third quarter. Therefore, the Federal Reserve has to decide when will be the right time to start increasing interest rates, without hindering the economic recovery.
Isaac Cohen is Former Director, Washington Office of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). He also serves as a commentator on economic and financial issues for CNN en Espanol TV and radio.
Source: HispanicBusiness.com (c) 2010. All rights reserved.
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