Thursday, December 03, 2009
Here's an interesting exchange from today's Bernanke confirmation hearing. This one was with Sen. Jim DeMint (R-SC), an ardent supporter of bringing the nation's central bank out from the shadows if this recent op-ed piece with Rep. Ron Paul (R-TX) is any indication.
DeMint: I'd like to ask a few questions Mr. Chairman, and I'd appreciate short answers because I want to cover some territory today but we don't know a lot about the operation of the Federal Reserve and for that reason I think the best way to judge performance is to look at outcomes, particularly outcomes based on the goals that you set for yourself.Ouch! Someone will probably put up a YouTube clip of this in a few hours or so. Have a look at some of the expressions on Bernanke's face during this exchange - he seems to go back and forth between smirks and indignation.
In your confirmation hearing in 2005, you specifically listed four duties of the Federal Reserve and I'd just like to mention those and just ask you how you think we've done. One of them was fostering the stability of the financial system and containing systemic risk that may arise in the financial markets. Has the Federal Reserve under your leadership accomplished that goal?
Bernanke: Um. No, but we also had lots of co-conspirators in that problem.
DeMint: Another duty you listed was supervising and regulating the banking system to promote the safety and soundness of the nation's banking system and financial system. Has the Federal Reserve under your leadership accomplished that goal?
Bernanke: We found some mistakes and we've tried to improve them.
DeMint: I appreciate your short answers. Another duty you listed was conducting the nation's monetary policy in pursuit of the statutory objective of maximum employment. Do you feel the Federal Reserve under your leadership has accomplished that goal?
Bernanke: We've moved monetary policy as much as possible to try to support employment growth, but, obviously a 10 percent unemployment rate is not very satisfactory.
DeMint: Again I appreciate your answers.