Taking a quick break from his Martha's Vineyard vacation, President Obama this morning announced he is nominating Federal Reserve Chairman Ben Bernanke for a second four-year term.
Bernanke, who has economics degrees from Harvard and MIT, has played a key role in dealing with the financial meltdown last year and now in lifting the nation out of recession. His current term expires Jan. 31, and Bernanke, a Republican originally picked by George W. Bush, would need reconfirmation by the Democratic Senate to keep his job.
"As an expert on the causes of the Great Depression, I’m sure Ben never imagined that he would be part of a team responsible for preventing another. But because of his background, his temperament, his courage, and his creativity, that’s exactly what he has helped to achieve," Obama said.
"Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall."
UPDATE: Senator Chris Dodd of Connecticut, chairman of the Banking Committee that will hold Bernanke's confirmation hearing, offered qualified support.
"While I have had serious differences with the Federal Reserve over the past few years, I think reappointing Chairman Bernanke is probably the right choice," Dodd said in a statement. "Chairman Bernanke was too slow to act during the early stages of the foreclosure crisis, but he ultimately demonstrated effective leadership and his reappointment sends the right signal to the markets."
"There will be a thorough and comprehensive confirmation hearing. I still have serious concerns about the Federal Reserve’s failure to protect consumers and I strongly believe these responsibilities should go to an independent consumer financial protection agency. I expect many serious questions will be raised about the role of the Federal Reserve moving forward and what authorities it should and should not have."
While Wall Street appears to be responding well to Obama re-upping Bernanke's tenure, he is not without his critics.
Senator Bernie Sanders, the Vermont independent, issued a scathing statement:
"As a result of the greed, irresponsibility and illegal behavior of Wall Street our country has experienced the worst economic decline since the Great Depression. Mr. Bernanke was head of the Fed and the nation's chief economist as this crisis, driven by reckless speculation, developed. Tragically, like the rest of the Bush administration, he was asleep at the wheel during this period and did nothing to move our financial system onto safer grounds," Sanders said.
“As the middle class of this country continues to shrink, we need a chairman of the Federal Reserve who is more concerned about expanding the productive economy – increasing decent-paying jobs for all Americans – than continuing to fan the flames of Wall Street greed and outrageous compensation packages.”
AFL-CIO president John Sweeney offered his backing for Bernanke, but said there needs to be more accountability at the Fed and more focus on jobs.
"Ben Bernanke has served ably as Chairman of the Federal Reserve at a time of great challenges. He has been forced to account for the serious failings of his predecessor," Sweeney said in a statement.
"The Federal Reserve must be made into a more publicly accountable body that makes job growth a central focus in the years ahead, particularly given signs that the economic recovery will be weak. We believe it's important that Chairman Bernanke's views on the governance and role of the Federal Reserve system also be a focus of his confirmation hearings. Finally, we must determine whether the Federal Reserve will oppose the creation of a Consumer Financial Protection Agency that will rein in Wall Street's excesses and look out for America's working families.
"We are eager to engage the Administration, Chairman Bernanke and the Congress in the weeks ahead about reform of unregulated financial markets that destroyed millions of jobs and trillions of dollars in investment capital."
The president's full remarks, and those of Bernanke, are below:
OBAMA'S AND BERNANKE'S REMARKS
THE PRESIDENT: Good morning, everybody. I apologize for interrupting the relaxing that I told all of you to do, but I have an important announcement to make concerning the Federal Reserve.
The man next to me, Ben Bernanke, has led the Fed through one of the worst financial crises that this nation and the world has ever faced. As an expert on the causes of the Great Depression, I'm sure Ben never imagined that he would be part of a team responsible for preventing another. But because of his background, his temperament, his courage, and his creativity, that's exactly what he has helped to achieve. And that is why I am re-appointing him to another term as Chairman of the Federal Reserve.
Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and out-of-the-box thinking that has helped put the brakes on our economic freefall. Almost none of the decisions that he or any of us made have been easy. The actions we've taken to stabilize our financial system, to repair our credit markets, restructure our auto industry, and pass a recovery package have all been steps of necessity, not choice. They've faced plenty of critics, some of whom argued that we should stay the course or do nothing at all. But taken together, this "bold, persistent experimentation" has brought our economy back from the brink. They're steps that are working. Our recovery plan has put tax cuts in people's pockets, extended health care and unemployment insurance to those who have borne the brunt of this recession, and is continuing to save and create jobs that otherwise would have been lost. Our auto industry is showing signs of life. Business investment is showing signs of stabilizing. Our housing market and credit markets have been saved from collapse.
Of course, as I've said before, we are a long way away from completely healthy financial systems and a full economic recovery. And I will not let up until those Americans who are looking for jobs can find them; until qualified businesses, large and small, who need capital to grow can find loans at a rate they can afford; and until all responsible mortgage-holders can stay in their homes. That's why we need Ben Bernanke to continue the work he's doing, and that's why I've said that we cannot go back to an economy based on overleveraged banks, inflated profits, and maxed-out credit cards.
For even as we've taken steps to rescue our financial system and our economy, we must now work to rebuild a new foundation for growth and prosperity. We have to build an economy that works for every American, and one that leads the world in innovation, in investments, and in experts -- exports.
Part of that foundation has to be a financial regulatory system that ensures we never face a crisis like this again. We've already seen how lax enforcement and weak regulation can lead to enormous wealth for a few and enormous pain for everybody else. And that's why even though there is some resistance on Wall Street from those who would prefer to keep things the way they are, we will pass the reforms necessary to protect consumers, investors, and the entire financial system. And we will continue to maintain a strong and independent Federal Reserve.
We will also keep working towards the reform of a health insurance system whose costs and discriminatory practices are bankrupting our families, our businesses, and our government. We will continue to build a clean energy economy that creates the jobs and industries of the future within our borders. And we will give our children and our workers the skills and training they need to compete for these jobs in the 21st century.
Much like the decisions we've made so far, the steps we take to build this new foundation will not be easy. Change never is. As Ben and I both know, it comes with debate and disagreement and resistance from those who prefer the status quo. And that's all right, because that's how democracy is supposed to work. But no matter how difficult change is, we will pursue it relentlessly because it is absolutely necessary to lift this country up and create an economy that leads to good jobs, broad growth, and a future our children can count on. That's what we're here to do, and that's what we will continue to do in the months ahead. So I want to congratulate Ben on the work that he's done so far, wish him continued success in the hard work that he has before him. Thank you so much, Ben.
CHAIRMAN BERNANKE: Thank you, Mr. President. I'd like to express my gratitude to President Obama for the confidence he's shown in me with this nomination, and for his unwavering support for a strong and independent Federal Reserve.
It has been a particular privilege for me to serve with the extraordinary colleagues throughout the Federal Reserve System. They have demonstrated remarkable resourcefulness, dedication, and stamina under trying conditions. Through the long nights and weekends and the time away from their families, they have never lost sight of the critical importance of the work of the Fed for the economic well-being of all Americans. I am deeply grateful for their efforts.
I especially want to thank my own family -- my wife Anna and our children, Joel and Alyssa. Without their support and sacrifice, I could not undertake this task.
The Federal Reserve, like other economic policymakers, has been challenged by the unprecedented events of the past few years. We have been bold or deliberate as circumstances demanded, but our objective remains constant: to restore a more stable financial and economic environment in which opportunity can again flourish and in which Americans' hard work and creativity can receive their proper rewards.
Mr. President, I commit today to you and to the American people that, if confirmed by the Senate, I will work to the utmost of my abilities -- with my colleagues at the Federal Reserve and alongside the Congress and the administration -- to help provide a solid foundation for growth and prosperity in an environment of price stability.
Thank you, sir.
THE PRESIDENT: Thank you. Great job.
CHAIRMAN BERNANKE: Thank you.
About Political Intelligence
Glen Johnson is Politics Editor at boston.com and lead blogger for "Political Intelligence." He moved to Massachusetts in the fourth grade, and has covered local, state, and national politics for over 25 years. E-mail him at email@example.com. Follow him on Twitter @globeglen.