CNN Money reports that President Obama has defended the Federal Reserve and its chairman Ben Bernanke today during a press conference. According to the article:
Bernanke has done a "fine job" and "performed well," the president said.
I guess we shouldn't be surprised that Obama is supporting a member of the government's team. It would be quite tacky to publicly state distaste for Bernanke, especially when he's arguing for the Fed to gain more power as the systemic risk regulator. But does this mean he will support another four-year stint for Bernanke when his first term expires in January? I doubt it.
It's hard to blame the Great Recession or credit crunch on Bernanke. He took office in February 2006, just as the housing bubble that his predecessor helped to create was getting ready to pop. Some might argue he acted too slowly at first, but the Fed's work since the crisis started has been substantial and mostly effective.
Yet, I wouldn't count on Obama keeping him around after 2010. The fact that Bernanke is one of the few Bush appointees that Obama has left to deal with must be a strike against him. Ideologically, he's not on the same page as the President or Larry Summers, Obama's main economic guru.
I think it's safe to say that Summers is eagerly awaiting his chance to manage the Fed. There was early speculation that this was why he wasn't appointed as the Treasury Secretary. Obama's kind words today are probably that, just that: kind words. I wouldn't read much more into his statement.
In general, I think we need to take a harder look at all the people who are wielding power, politically or financially, in the wake of the crisis. The NYT puff piece on Bill Gross this weekend is just another example of how easy it is to miss the big questions we need to answer if this is going to come to an end. Seriously, we're going to enrich yet another financier with tax payer dollars--and no one, not even the Times, is going to notice?
There's a lot of good conversation about that happening at NewDeal2.0. We could stand more of it.