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Oppose Bernanke Reappointment as Fed Chairman

Written by JBS Staff on December 15 2009.

Ben BernankeThe Federal Reserve Act was originally rushed through Congress just before Christmas in 1913. The inherent dangers in creating the central but quasi-private bank were noted by some congressmen at the time, and warnings issued about the dangers of monetary inflation if such a centralized monopoly was created.

Today those warnings have materialized with the Federal Reserve controlling the amount of currency in circulation, the value of that currency, and even the interest rates on borrowed currency. In essence an independent and separate financial government resides in the Federal Reserve, and it all takes place without congressional input or oversight. This state of affairs is unconstitutional and needs to be reversed.
The Senate Banking, Housing, and Urban Affairs Committee is poised to vote December 17 on Ben Bernanke’s second four-year term as chairman of the Federal Reserve. There is one fly in the ointment and that is Sen. Bernie Sanders’ (I-Vermont) hold that he placed on Bernanke’s confirmation proceedings that could delay, but probably not scuttle, the confirmation.

A hold changes voting requirements. Instead of the usual 50 votes, democrats would need 60 senators to agree to bring the nomination to a vote. “The American people did not bargain for ... another four years for one of the key architects of the Bush economy,” said Sanders as he pointed to Bernanke’s failure as fed chairman.

Installed on February 1, 2006 by George Bush to take the place of Alan Greenspan, Bernanke is the establishment’s man, supported by President Obama and leftist and centrist Democrats and Republicans.

Bernanke has been much criticized for his role in the current economic crisis. Since Bernanke took the helm of the Fed, the dollar has lost about 50% of its value as measured by the price of gold. During the same time as the dollar was losing 50% of its value against gold, the money supply of dollars increased by twofold as measured by the "monetary base" of the Federal Reserve. In brief, during this time of unprecedented economic and financial crisis, including the extraordinary increases in our nation's federal deficits and national debt of the past couple years, the Bernanke-led Federal Reserve has papered over these problems with large-scale increases in the money supply. While such increases in the money supply might appear to be benign over the short term of days, weeks, and months, these money supply increases have a devastating long-term effect on virtually all Americans by devaluing their income (both current earnings and retirement), investments, and insurance. For example, the dollar has lost about 95% of its value since the Federal Reserve was established in 1913.

While Bernanke is strongly in favor of maintaining the Federal Reserve’s independency and even refused to answer questions about the Fed’s role in the economic crisis, there is a growing demand for the end of Bernanke’s leadership and also for real transparency in the form of a Federal Reserve audit. Writing on the effort to audit the Federal Reserve John F. McManus pointed out, “The American people are being cleverly divested of their wealth. And power over what happens in our nation sits more with the Fed than it does with Congress.”

In order to end the illegitimate power of the Federal Reserve and the guarded secrecy of elitist money managers like Ben Bernanke, a good first step would be in opposing his reappointment.

Many Banking Committee members have already announced their support for Bernanke’s confirmation, with Committee Chairman Christopher Dodd (D-Conn.), leading the way., saying the nomination will be easily approved. However, three committee Republicans, Jim DeMint (S.C.), David Vitter (La.), and Jim Bunning (Ky.) are opposed to the nomination. The panel’s ranking Republican Richard Shelby's (Ala.) view, is an unknown at this time. 

For now the Senate Banking Committee will be voting on Bernanke’s nomination.  If approved, the nomination will then move to the Senate floor where it will probably be scheduled for a vote sometime in early 2010. Although his term ends Jan. 31, Bernanke will most likely continue at the helm of the Fed as “acting chairman” until a permanent appointment is made.

Contact your senators and let them know they should oppose the reappointment of Ben Bernanke as Chairman of the Federal Reserve.

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