College: Reconfirmation of the Chairman of the Federal Reserve System This paper explores the issues surrounding the reappointment of Bernanke with an aim to discuss whether he deserved being reconfirmed and if the decision as made by Senate was right or wrong. The study explores views of different people who have criticized and others who have supported the reconfirmation to give a relevant view. As mentioned by Coffey (20090, Bernanke has been pivotal in making federal decisions that have largely impacted Americans today, he has had monumental influence on the economy and has been refereed as one of the greatest scholars of depression since he took over the federal system at a time when it was collapsing.
Bernanke has done a lot of work including printing more dollars to keep moving the economy, slashing key lending rates to almost zero. As Coffey put it, these are quick new measures that Fed feared to do during the 1930’s depression, for this reason, Bernanke has been vigorous in managing the Federal Reserve system and his confirmation was vital, it is deemed secure though surrounded with mistrust in terms of Federal Reserve approaches.
According to Magana (2010), Bernanke’s reappointment confirmation has mainly been a test of the independence of the central bank, which is a crucial element of Fed’s ability to implement what is economically essential rather than what is popular. His chairmanship is deemed crucial in enabling American economy avoid catastrophe. However, his critics argue that Bernanke might not be in position to do what is necessary due to pressure exerted by congress, he is criticized of hefty bonuses accorded to AIG but his supporters view is that Fed has no authority on such decisions for which Bernanke is being blamed of.
However his supporters agree that he made mistakes by underestimating threat of the booming housing market thus the bust and the eventual fallout of the American economy. Paul (2009) has supported Bernanke’s reappointment arguing that he has been the most powerful scholar in controlling money supply and has the capability to implement a big plan without having to be monitored by the Congress. Paul (2009) has cited several instances when Bernanke has responded to situations in the most ethical and successful manner including the East Timor wealth funds to diversify United States bonds to which Bernanke argued that the effect would be wiping out of the U. S.
Treasury and the eventual poverty and desperation among Americans. There are many issues that Bernanke is being criticized of including the increasing disability claims, soaring food prices, huge debt and insurers’ loss among others. However Bernanke has been proactive in implementing policies that have kept American economy on check and his dynamism calls for another term since he has the capacity to grow the economy. According to Lp (2007), Bernanke takes note of the potential risks facing the American economy but takes outlook and this presents some of the potential grounds that economic growth will increasingly slow down.
However, Magana (2010) argued that much of critics towards Fed and the prevailing uncertainty about Bernanke’s reconfirmation is unfortunate since the scorn is undeserved. The chairman has defended Fed against the efforts to diminish the body’s author and is vital at such a time when Congress is carrying out an overhaul in financial regulations to avoid another financial crisis. Conclusion From the various views explored, one would conclude that the Senate made the right decision to reconfirm Bernanke, this is because the economy deserved such a person as cited by Coffey (2009), who takes new and quick decision that are vital in preventing the economy from depression.
Having led Fed at a time when the American economy came near to depression makes him deserve another term (FederalReserve, 2011). However, he should not repeat the mistakes made previously like underestimating the effects of the mushrooming housing market that resulted to financial crisis. References Coffey, L.
(2009). Bernanke is TIME’s 2009 person of the year. Retrieved from: http: //www. msnbc. msn. com/id/34441681/ns/today-today_people/? GT1=43001 FederalReserve. (2011). Board Members. Federal Reserve. gov. Retrieved on 7th December 2011 from: http: //www. federalreserve. gov/aboutthefed/bios/board/bernanke. htm Magana, J. (2010). Senate confirms Bernanke for second term. Retrieved from: http: //www. msnbc. msn. com/id/35124892/ns/business-stocks_and_economy Paul, R. (2009). Ron Paul reacts to Bernanke as ‘Time’ person of the year. Retrieved November, 2010, retrieved from: http: //www. zimbio. com/Ben+Bernanke/articles/NsgiQEG0wyW/Important+News+Dec+17 Lp, G. (2007). Bernanke notes risks but holds to outlook; Fed Chief sees more factors that could slow growth; added subprime attention.
Wall Street Journal, A2. Retrieved from: http: //proquest. umi. com/pqdweb? index=9&did=1246145511&SrchMode=1&sid=1&Fmt=4&VInst=PROD&VType=PQD&RQT=309&VName=