Sent to My Senators, Re: Bernanke (Please Vote No)

I sent them the following:

I am writing to ask you to vote against reappointing Ben Bernanke as Chairman of the Federal Reserve. Additionally, I am requesting that you support a filibuster of his nomination.

While I believe that he is a very talented economist, I believe that his outlook, and his prior performance, make him unsuited for continued service in this position.

First, and most importantly, he has made it clear that he will not move on unemployment if it means moving away from a 2% inflation target by the Federal Reserve.

His statements saying that his goal was to preserve, "the anchoring of inflation expectations," is simply dangerous and wrong in the midst of the worst downturn since the Great Depression.

By expressly stating that he will choose to ignore the 2^nd mission of the Federal, the maintenance of full employment, he has shown himself to be ideologically unsuited to the post.

Given that unemployment is at 10% by the U-3 measure, or 17.3% by the more representative U-6 measure, and there is little if any indication that there will be significant improvement in the jobless rate this year, this is short sighted and destructive.

Additionally, his fierce opposition to reforms of the financial system, particularly his opposition to the Financial Consumer Protection Agency (FCPA) shows that he is out of touch with the need to protect consumers from predatory institutions marketing dishonest financial instruments.

His suggestion that the Federal Reserve would fulfill this role, when it had that role pre-crisis, and refused to act on credible evidence of fraud and deception, is simply nonsense.

This is further compounded by his position on transparency at the Federal Reserve, where he is clearly stonewalling every effort for investigators to understand the nature of the financial meltdown of 2008.

The unwillingness to come clean on the failures that might have happened at the Federal Reserve Board and the regional banks means that there will be no meaningful disclosure, and without disclosure, no lessons will be learned, and this cycle will be repeated, particularly given his record of being an enthusiastic cheerleader for the housing bubble, and the associated dodgy mortgage bubble, before they popped.

The primary argument for his reappointment is that if he is not reappointed, it will somehow shake the financial markets, and trigger another disaster.

This analysis assumes two things:

1. That he has been thoroughly captured by Wall Street, and so the large investment banks are demanding that he kept to serve their interests, and not those of the people.
   
2. That he is simply indispensable, and as Charles de Gaulle said, "The graveyards are full of indispensable men."

If there are lessons to be learned from Alan Greenspan's disastrous tenure, it is that the "Greenspan Put", where the expectation of bailout created moral hazard that led to reckless behavior, and that the "Rock Star" Fed Chair is to be avoided at all cost.

I followed up with a phone call to both offices.