President Obama announced today that he will nominate Ben Bernanke to serve as Chairman of the Federal Reserve for a second term. This is a huge mistake.
Ben Bernanke started as Chairman of the Federal Reserve on February 1, 2006–about two years before the economic crisis fully blossomed. While his policies are not responsible for the onset of the crisis, they have done little to help the situation. Chairman Bernanke has consistently been wrong about his assessments of the economy since he began his tenure:
I think that nominating Ben Bernanke for a second term is a careless move on President Obama’s part. For one, the man ran on a platform of “change.” He hit the Republicans and President Bush particulary hard on two main issues–the administrations handling of the war(s) and the administration’s handling on the economy.
And yet, in his first year of office, President Obama has continued to allow President Bush’s Secretary of Defense to serve, as well as allowing President Bush’s choice for Federal Reserve Chairman to stay on. Selecting a new Federal Reserve Chairman would have been a great opportunity for the President to reinforce his message of “change.” He could have dumped Chairman Bernanke and blamed President Bush for the economic crisis in the process. By renominating Chairman Bernanke, President Obama has taken ownership of the economy, and tacitly accepted President Bush’s decisions with regard to the crisis.
This will be one of the moments that will come back and bite President Obama in the 2012 Presidential elections.
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