Bernanke approval 'on the ropes'

Dean Baker
Co-director, Center for Economic and Policy Research

Bernanke's approval is clearly on the ropes. This has prompted the Wall Street and elite media crew to rustle up all the tricks they used to push TARP through back in October of 2008.

First and foremost, they are pointing to the decline in the stock market as evidence that the failure to reappoint Bernanke will devastate the economy. Of course the stock market is not the economy and no serious economist would ever advocate making policy based on daily movements in the stock market (or at least not when they are being honest). Furthermore, there is no way to move the economy away from its current Wall Street bubble-driven growth path, to one built on a productive economy, without at least some temporary decline in stock prices. Such a decline is inevitable if for no other reason than the fact that Goldman Sachs, J.P. Morgan and the rest account for a substantial portion of the value of the stock market.

If we can never do anything that even temporarily hurts stock prices then we can forget about ever reining in Wall Street.

To briefly summarize the case against Bernanke, at the top of the list is the fact that his failures at the Fed (both as chairman since 2006 and as a governor since 2002) brought the economy to the brink of a second Great Depression (Bernanke's assessment, not mine). Anyone else who had failed so completely at their job would be fired in a minute. Only in Washington and on Wall Street could such a disastrous record be rewarded with another term in office.

(Continued here.)