Wednesday, January 27, 2010

Confirm Ben Bernanke now

Editor's note: Dr. Jason White, our director of investments, writes a weekly column for the Maryville Daily Forum. We've posted this week's column, which focuses on why he thinks Ben Bernacke is a rock star, here. Disagree? Tell us why in the comments. We love a good discussion.

By Dr. Jason White

The Senate is scheduled to vote on the nomination of Ben Bernanke as Federal Reserve Board Chairman today. Like so many things in Washington, Bernanke’s confirmation has been bungled by both Republicans and Democrats who appear more interested in grandstanding to build their own political capital than in ensuring swift and deserved reappointment of the Chairman.

Bernanke has been the perfect leader of monetary policy initiatives designed to combat the financial meltdown and subsequent Great Recession which still plagues many parts of the economy.

It is well known that Bernanke is the preeminent living scholar of the Great Depression and the policy missteps that kept the United States, and the world, mired in economic misery from 1929 until the beginning of World War II. As an aside, the field of economics is oft referred to as the “dismal science” because those of us who practice it sometimes reach dark conclusions like war is a wonderful economic stimulus and jobs program, provided the conflict is not fought on our own soil. Twisted.

Sure, we’ve got problems in our economy – big ones! Some fear a double-dip recession. Others are concerned about the unemployment rate. A few are sniping about inflation risks. Still more are worried about the relative value of the dollar and the tsunami of Federal spending. Most of us are concerned about all these economic issues and more.

I support Ben Bernanke and call on the U.S. Senate to unite and confirm this worthy leader now!

Senators are the worst when it comes to Monday morning quarterbacking. Everyone now knows that Brett Favre should have run to set up a Minnesota last-minute field goal attempt in the NFC Championship game, but instead he threw an interception. If Congress were asked to confirm Favre as next year’s “Chairman” of the Vikings, you bet your last nickel that hearings would be held and that the focus would not be on the accomplishments of the team.

Similarly, Bernanke has endured grilling, belittling and second-guessing that has been unfair and ignored many of the game-winning plays he has called. In the fall of 2008, we were literally staring directly into a financial abyss that almost swallowed us whole. Bernanke pulled the economy back from the edge using extraordinary play-making ability, finesse and quiet confidence.

Markets have become understandably nervous as the Bernanke vote nears. The Dow fell about 4 percent just last week as political criticism of the Fed Chieftain roiled. As a student of Federal Reserve policy actions, it is clear to me that Bernanke’s economic policy calls have been mostly correct and mostly helpful. Apply the “but-for” test to the situation. But for the leadership of Ben Bernanke during the Great Recession, we would find our economy in much worse shape than it currently stands. We are on the right road, and we have the right driver behind the wheel.

Dr. Bernanke’s confirmation should be a slam-dunk. If there was a medal of honor for financial economics, he would have my vote.

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