Bernie & Bernanke

Editorials / Dec. 10, 2009 3:35pm EST

Vermont Senator Bernie Sanders has decided to make political hay out of President Obama’s appointment of Ben Bernanke to another term as chairman of the Federal Reserve. The senator has thus placed an unnecessary new boulder among all the other roadblocks that various interest groups have thrown in the way of the new president’s agenda.

Senator Bernie has rejected the route of constructive teamwork with the new administration in favor of populist rhetoric that may find favor with both far right and far left but does not promote a realistic solution to the problems of the American economy.

The senator’s statement explaining his decision degenerated quickly to name-calling. Bernanke, Sanders said, was “one of the key architects of the Bush economy” and who was “asleep at the wheel” before the financial crisis. Most of the rest of his statement is a recitation of the various horrors of the financial crash and its aftermath, for which he blames Mr. Bernanke.

As it happens, the Fed chairman is widely believed by most Republicans and Democrats to have helped forestall a much deeper recession/depression by the steps he took in dealing with the banking system as the crisis developed. That’s why President Obama nominated him. But Bernie is scornful of Bernanke’s strategy, which did indeed involve financially shoring up big banks and other lenders—not to put money in the hands of the big bankers but to put money into the hands of the businesses and individuals throughout the country who needed bank credit to get their businesses rolling again and to save their homes.

Sanders apparently believed that by the clear light of the financial crisis, the Obama administration would preside over a proletarian revolution that would tear down big banks all over the country and institute all sorts of populist changes (some of them good, some of them foolish) and would cause the heads of CEOs to roll up and down Wall Street.

Well, it didn’t happen, and it’s a good thing, too. What the nation needed more than anything was stability and a sophisticated understanding of the financial system. Had the Fed chairman suddenly morphed into a raving populist and had he tried to remake the system from top to bottom, the resulting drying-up of credit could well have plunged the U.S. economy into a depression that would make this one look like a piece of cake.

But Bernanke has held a steady hand that has won the confidence not only of financial people but of bona fide Democrats like the President who has nominated him. Senator Bernie’s self-serving tactics this week cast no good light on the state of Vermont, and serve only as an annoying distraction in the national discussion.

Return to top