Confirm Bernanke

The unlikely election last week of Republican Scott Brown to Ted Kennedy's old Senate seat in Massachusetts awakened Democrats to the surly mood of the electorate. But senators who are trying to deflect that frustration onto Federal Reserve Chairman Ben Bernanke are playing a reckless game.

Bernanke's reappointment, though still expected, remains in doubt after Democratic Sens. Russ Feingold of Wisconsin and Barbara Boxer of California said they wouldn't support him. The Fed chief's term expires Sunday.

The backlash against Bernanke has the feel of knee-jerk election-year politics. Failure to confirm Bernanke would put the Fed's essential independence at risk and send financial markets into a tizzy. Like some of the critics, we believe Bernanke should do more to spur banks to lend to help the economy and be more open to consumer protection. But he has earned reappointment.

Bernanke, a student of the Great Depression, wielded the power of the Fed quickly and effectively as financial markets tottered on the brink of collapse during the grave days of September 2008. Credit had run dry amid fears over the toxic assets on the books of the nation's big banks. Under his direction, the Fed forced interest rates to near 0%, dramatically increased its portfolio of loans and securities to $2.2 trillion and bailed out Bears Stearns and AIG.

Bernanke also backed supersized government spending by both Presidents George W. Bush and Barack Obama on the theory that the government had to step in aggressively.

It worked. As bad as it is, the Great Recession is no redux of 1933.

Bernanke deserves some of the blame for the failure of the Fed to act as the bubble in the housing market grew. Though he didn't assume the chairmanship of the Fed until February 2006, he was a member of a Fed Board of Governors that voted repeatedly to keep interest rates low even amid signs of rough water.

But were the critics who now call for his head decrying low interest rates from 2001 to 2007 as the bubble grew? Were they calling for tighter lending standards?

In a globally connected world, Fed independence is essential. A Fed beholden to populist political interests will not be able to give the economy the bitter medicine it sometimes needs. Withholding support for no better reason than it's a tough election cycle — not to mention the black eye it would give Obama — threatens that independence.

The central bank has long been a favored punching bag, dating to the days of President Andrew Jackson and the Second Bank of the United States. But failing to confirm a sitting Fed chairman would be something new, an unfortunate signal that the politics in Washington has become so desperate that even the health of the economy is not as important as whether a senator can win the next election.

REPRINTED FROM THE MILWAUKEE JOURNAL SENTINEL.

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