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  • Senate Needs Firm Assurances from Bernanke for Second Term

    Yesterday, President Obama announced his intention to nominate Ben Bernanke to a second four-year term as Chairman of the Federal Reserve Board. Bernanke’s tenure coincided with the most chaotic and painful period in modern financial history. Bernanke has overseen a previously unimagined expansion in the range of Fed programs, and he played an important part in the nearly unprecedented expansion of the role of the government that has taken place over the past year.

    Bernanke’s reappointment must now be confirmed by the Senate. Before endorsing a second term, members must be assured the Fed will return to its core mission, that the recent expansion in its activities will subside quickly, and that the Fed’s balance sheet will be reduced expeditiously roughly to previous levels. Specifically, senators should ask the nominee for firm – and positive – answers to four key questions:

    • Will he clearly describe and execute a firm exit strategy, unwinding the actions taken as part of its various emergency interventions? Since last fall, the Federal Reserve has undertaken vast new programs to support financial institutions, increasing its balance sheet, expanding the reach of its authority, and — to an as yet poorly understood extent — redefining its role in financial markets. Whatever the propriety of these actions, Bernanke should now must set – and execute — a firm, expeditious, and transparent “exit strategy” from these extraordinary interventions (even if doing so increases the level of stress in financial markets or the economy generally).

    • Will he maintain low and stable inflation? The core mission of the Fed includes providing liquidity through its monetary authorities so as to maintain low and stable inflation, even when the economy is growing or shrinking rapidly. Successfully carrying out this mission in the coming years will likely prove extraordinarily difficult given the immense expansion of excess reserves by the Fed and central banks around the world to combat the recent crises in financial markets. Bernanke should commit to continue to focus on this as a top priority.

    • Will he reject expansion of the Fed’s regulatory role? In the wake of last year’s financial crisis, many proposals for financial regulatory reform have been put forward would vastly expand the role of the Fed in regulating financial institutions, giving it ill-defined authority to protect against “systemic risk”. But adding such a mission to the Fed would reduce its ability to focus on monetary policy–its key role–and expose it to even more political pressure than it now faces. Bernanke should provide firm assurances that he will preserve the Fed’s focus on its core monetary policy duties, and not support such an expansion of its mission.

    • Will he resist creation of an international financial regulator? Bernanke should provide assurances that he will forcefully resist pressures from Europe and other quarters for a supranational financial regulatory authority that would diminish U.S. sovereignty and could greatly limit financial innovation and economic growth in the decades ahead.

    Posted in Economics [slideshow_deploy]

    3 Responses to Senate Needs Firm Assurances from Bernanke for Second Term

    1. DANIEL CABRERA, MERR says:

      i wander if the heritage foundation blog will permit this commnent to be posted – for lately the are acting like clandestine liberals blocking all conervative-oriented comments,…all I can say is that there is too much of corruption aorund and bribes and intimidation are vivid factors;

      Well,… here is this , I bet this blog will tot have it posted;

      I PREDICTED ALL THIS ,….but nobody listened,…instead the call me names with BIG WORDS (nasty ones) AS BIG AS THE GALAXY,….however now, REALITY IS EXPOLDING IN THE FACES OF ALL THE ULTRA-OBAMANIZED KOOL AID DRINKER….Indeed , life is an adventure.

      If by any chance anyone may think that the ‘positive fluctuations’ in the market is because the so called ’stimulus plan’ of Obama and his gang is working?…..THINK AGAIN!

      They will try to “ENEMIZE’ that ILUSSION OF SUCCESS;____

      Pres Obama seems totaly cueless regarding ECONOMY OR ANYTHING ELSE….to the point that he put incharge very colourful people such as, TAX CHEATERS, TERRORIST ADVOCATES,NULL-EXPERIENCE IN SECURITY AND MILILTARY SPECTRUM,…things like that.____

      And WE,THE PEOPLE, are supose to have 'faith' on this kind of predicament?

      It is clear he does not have any kind of interest to keep this country protected for he is weakening our national securilty system (it looks that the masses are not noticing this- so his pseudo-hypnotic practices still effective with somes in the populache)

      Anyway, he is banking in DIVERSION VIA THE MANTRA OF ECONOMY-ECONOMY-ECONOMY____

      .People, listen well; THERE IS A MASTER PLAN OF DESTRUCTION FOR OUR BELOVED COUNTRY.

      Here is the thing;

      The SPENDING PACKAGE ('stimulus') is/was deisgned TO PERPETUATE THE CORRUPTED MALPRACTICES BY THE ORIGINALS CROOKS AND THIEVES AT WALLSTREET THAT STARTED ALL THIS, BACKED BY 'THE COVER-UP GROUP' (Barney Frank, Reid,Pelosi,Cox,Dood,….and others weeds)

      Truth is that eventually the economic grid will come back on track – FOR THE MARKET HEAL ITSELF – and Obama and his gang will claim 'SUCCESS' to this so called 'stimulus'. WE ALL HAVE TO REMEMBER AND UNDERSTAND THAT ECONOMY SHOULD BOUNCE BACK AS NORMAL MARKET-DEMAND AND CREDIT CASH FLOWING MOVEMENT FOR THAT IS THE ALWAYS DYNAMICS IN THE ECONOMY SPECTRUM….IT IS A REGULAR AND NORMAL CYCLE AND HISTORY GIVES LIGHT INTO THIS.____

      But Obama and his gang will try ( ooohhh!! THEY WILL TRY ALRIGHT !) via SPLENDOROUS OBAMA-ELOCUENCY MIND PSEUDO-HYPNOTIC WAYS (just like using an ENEMA …like in the past campaing before the FRAUDULENT ELECTIONS) will try to feed into the public that THE SUCCESS is because his leadership. DOES HE HAS LEADERSHIP?…..does anyone with two inches of forehead and not be a cave-man/woman can invision that IF he has real leadership? Obama (although tagged as "president" is only 'THE FRONT-MAN', THE SYMBOL for the mases, the "modum operandus" for a rogue group with SYSTEMATIC DESTRUCTION INTENTIONS for our country – AND WE ARE EXPERIENCING IT !____

      Obama and his gang are DRYING ! the taxpayer money reserves. WE NEED BETTER, HONEST AND CONCIOUS LEADERS AT HELM! The current administration is not good.

      ALL THIS THEATER IS PART OF A MASTER PLAN FOR THE DEMISE OF OUR COUNTRY!____

      Obama is doing his job brilliantly- PREACH WITH BEAUTIFUL ELOQUENCY AND SOUND CONVINCING TO THE MASSES….but nothing is working as EXPECTED,…AS PROMISED -…ALL IS A BIG FALACY! …THE PEOPLE HAS BEEN CHEATED !

      THE OBAMA GANG CORRUPTED ANTI-AMERICAN ADMINISTRATION IS PERPETUATING THE ASSAULT TO THE TRUST AND MONEY OF THE AMERICAN PEOPLE, NOT TO MENTION WE NOW ARE WEAKER ON NATION.

      And how your day is going so far?

      Daniel Cabrera

      Merrillville Indiana

      PS, To all OBAMA WORSHIPERS,…You wanted Obama?,…..EAT OBAMA NOW! – CHOKE ON IT!

    2. Roger S., Ma. says:

      Now I'm going to be really unfair:

      Imagine, if you will, asking the fox to guard the chicken-coop. What will he answer? — "Yes, ma'am, my pleasure ma'am. Yes, ma'am, just walk around. I hear you, sir, no going inside, promise! Who, me? Nooo Sireee! Not me! Was the coyote, I swear it, they're sooo clever, are they not? I swear, I never ate a chicken in my life! Don't even like chicken, only ducks, and only "à l'orange". No, ma'am, I understand perfectly, no inviting friends over for dinner! Whaaat?! Breakfast at McD.'s? Sure ma'am, whatever you say, ma'am!" — Ha, Ha, Ha. Gimme a break!

      Does anybody honestly believe that when the chips are down Bernanke is going to forget who put him there, going to remember what question this or that Senator asked him or what he answered or promised? Did Greenspan? — Holy smokes! If you want to keep the fox from your chickens, you have only two options: Build a Coop like Fort Knox, or Don't keep chickens! (Don't even dream of exterminating foxes. Never worked and never will: they're just too numerous and clever!). If you don't have either option, and he must guard the coop, then put an extra fence around the whole thing, him in it. You definitely don't want him inviting his "friends". The best old fences used to be made of gold, with silver hinges and locks!

    3. Bill San Antonio TX says:

      Daniel C is certainly "passionate".

      The times and situation is what it is.

      The only recourse is to continue to contact our representatives in a calm, reasonable manner – otherwise they will definitely shut us out. Do it often, do it continuously.

      Most importantly, vote and encourage your friends to vote in 2010 – and always.

      We cannot forget that Ben Bernanke began under George W. Bush. The President, then stated, words to the effect that "he had to let free markets go in order to save it".

      I understand the historical crisis President Bush underwent. And, in the short term, an infusion of vast amounts of money to stabilize the banking system in order to prevent catastrophic collapse was not all the wrong of an idea. But, President Bush opened Pandora's Box trying to do the right thing for America.

      Bernanke and POTUS have taken this opening and now are trying to literally transform the entire country through continuous unsustainable spending, borrowing/debt. This should not surprise anyone who "listened" during the Democratic Campaign.

      I think what has surprised everyone is the seriousness in which the current administration/congress has proceeded. They view this as their best chance and are willing to gamble political careers and legacy. Even Bernanke cannot possibly believe this will work long-term.

      I fear the worst consequences of this spending will not appear for years down the road – when the only fix (for whoever is in office) will be a permanent high tax rate for everyone – and, thus, the irreversible destruction of our economy.

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