Bernanke makes pitch for 2nd term as Fed head

By: JournalNow Staff | THE ASSOCIATED PRESS
Published: December 04, 2009

WASHINGTON

Making a case for a second term as head of the Federal Reserve, Ben Bernanke said yesterday that he has the tools and the political backbone necessary to reel in massive economic support once the recovery is firmly rooted.

While widely credited with helping keep the Great Recession from becoming a second Great Depression, Bernanke faces enormous anger from both Congress and the public for bailing out Wall Street, while ordinary Americans are struggling under the crush of high unemployment, stagnant incomes and rising foreclosures.

If confirmed to a second, four-year term, Bernanke vowed to work with Congress to overhaul the nation's financial regulatory structure and to bring about stronger and more effective supervision, he told the Senate Banking Committee.

"It would be a tragedy if, after all the hardships that Americans have endured during the past two years, our nation failed to take the steps necessary to prevent a recurrence of a crisis of the magnitude we have recently confronted," Bernanke told the panel.

Despite all the criticism heaped on him about the bailouts, his confirmation doesn't appear in doubt at this point.

Sen. Christopher Dodd, D-Conn., the chairman of the panel, predicted that Bernanke would win confirmation. "Under your leadership, the Fed has taken extraordinary actions to right the economy," Dodd said.

Nonetheless, Dodd wants to strip the Fed of some of its powers, including overseeing banks, because regulators failed to crack down on dubious mortgages and other problems that figured prominently in the financial crisis.

Dodd and others drew a distinction between Bernanke's economic leadership and the operations of the Fed as an institution itself.

Efforts already have begun at the Fed to tighten oversight of banks and other financial firms. And the Fed is actively engaged in identifying and implementing improvements, Bernanke said.

Bernanke, 55, has taken heat for failing to detect early signs of the housing collapse.

Lax regulatory oversight by the Fed and others was blamed for contributing to the crisis.