OAK BLUFFS, Mass. – President Barack Obama announced this morning that he has decided to nominate Federal Reserve Chairman Ben S. Bernanke for a second term starting Jan. 31.
President George W. Bush first appointed Bernanke, a Republican and former Princeton University economist, as chairman of the White House Council of Economic Advisers in 2005. Bush then picked Bernanke to replace outgoing Fed Chairman Alan Greenspan early the following year.
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Bernanke, 55, has led the Fed through one of the most tumultuous periods in its 95-year history, expanding its power and its balance sheet over the past year and a half to stave off what he warned could have been a second Great Depression.
Bernanke “has led the Fed through one of the worst financial crises that this nation and this world have ever faced,” Obama said in remarks prepared for delivery this morning in Martha’s Vineyard, where Bernanke joined him.
“As an expert on the causes of the Great Depression, I’m sure Ben never imagined that he would be part of a team responsible for preventing another,” Obama said. “But because of his background, his temperament, his courage, and his creativity, that’s exactly what he has helped to achieve.”
Bernanke thanked Obama at their joint news conference this morning. “I will work to the utmost of my abilities” to help “provide a solid foundation for growth and prosperity in an environment of price stability,” Bernanke said, according to Bloomberg News.
Bernanke’s nomination will be subject to Senate approval. Although he has already been endorsed by Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, Bernanke has come under fierce criticism from both liberal and conservative lawmakers for expanding the Fed’s power; keeping some of the central bank’s dealings out of public view; and failing to move to puncture the housing bubble as a Fed governor and then a member of the Bush administration.
“While I have had serious differences with the Federal Reserve over the past few years, I think reappointing Chairman Bernanke is probably the right choice,” Dodd said yesterday in a statement. “There will be a thorough and comprehensive confirmation hearing.”
Wall Street cheered the news of Bernanke’s reappointment, which White House advisers said Obama opted for in order to maintain continuity and reduce uncertainty as the economy begins to recover from the financial crisis.
