ShareThisPresident Obama's decision to reappoint Ben Bernanke as Federal Reserve chairman has been criticized as being the "safe choice." Some within Obama's party had hoped that he would pick a prominent Democratic economist for the post. Bernanke was first appointed to the post by President George W. Bush in 2006 after serving as a top economic adviser to Bush.
But "safe" is what we want. Bernanke is one of the chief architects of the strategy to pull the country out of recession -- which seems to be working, even if not as fast as most would like -- and it makes sense to let him see it through. He is generally credited with yanking the country back from the brink of depression.
In doing so, Bernanke and company showed a willingness to act and act decisively, using the Fed to pump hundreds of billions of dollar to prop up tottering enterprises of the too-big-to-fail variety through loans, guarantees and asset purchases. The Fed chief now has the difficult task of timing how to extract that money without triggering an economic relapse on one hand or a damaging round of inflation on the other.
His re-nomination provides continuity and keeps together a team that has worked well together, Obama's Treasury secretary, Timothy Geithner, and chief economic adviser, Christina Romer.
His relations with Congress have been sometimes rocky, particularly with Senate Banking Committee chairman Chris Dodd, Conn., and ranking Republican Richard Shelby, Ala. He has had "serious differences," in Dodd's words, with both but Dodd said Bernanke was the right choice and sent the right signal to the financial markets, which took the news well on a day when the economic news was otherwise terrible.
The White House and congressional budget offices released an estimate of a record deficit this year of $1.6 trillion. The White House forecasts a 10-year cumulative deficit of $9 trillion. Congressional economists looked for a 10-year deficit of $7.14 trillion but that assumes Bush's tax cuts will expire at the end of next year. Both see unemployment peaking at around 10 percent and averaging 9.8 percent in 2010, a half point higher than this year.
Both foresee a long and slow recovery. Chairman Bernanke, you have your work cut out for you.
(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)
