It appears that in light of the Brown election, the Senate may no longer have the votes needed (likely 60) to reconfirm Ben Bernake as Federal Reserve Chairman. ABCNews is reporting that getting the magical 60 votes necessary may be more difficult than they had believed and that Bernanke's reappointment may be in Jeopardy. While many here will cheer this as good news, I view it in another light and see it as both bad for the economy and bad for Obama.
Ben Bernanke is an expert on the Great Depression and the reasons why it lasted for over a decade. He is an academic with no ties whatsoever to Wall Street and was a colleague of Paul Krugman before taking over for Greenspan at the Federal Reserve. While we can all debate (quite endlessly it seems) who is responsible for the current recession (ie the past), what we need to look to is the future and how we are going to avoid falling into another depression (and allowing that, start to recover). For that reason, Ben Bernanke is the right guy for the job (for now). I believe that Bernanke needs to be confirmed as he is the right man (possibly the only man) for the current task (ie avoiding depression and starting a recovery), but I also believe that he may not be the perfect choice once recovery is firmly entrenched and the risks of collapse are behind us.
Since the March lows, most leading economic indicators are up significantly and it appears that we have at least moved off of the bottom of the decline (for now). Much of this (if not most) recovery can be awarded to Bernanke's expertise in the depression and what went wrong during that economic collapse (which closely mirrored this one in terms of potential causes). While many of the programs and "bailouts" are quite distasteful, they were essential at the time to prevent another depression and it is only now that we are removed from the lows that they draw ridicule (even though they were the correct measures at the time).
A failure to confirm Bernanke's appointment would also be a major blow to Obama during this important election year and could spell further doom for our attempt to maintain a hold on Congress, as it will not be the Democrats (for the most part) who vote against Bernanke, but Republicans who are motivated purely by political gain. I always am suspect of believing that the Republicans are right on an issue and are not just acting out of political calculations, which I believe the move against Bernanke is.
Finally, before blame is cast on Bernanke for Greenspan's mess, I want everyone here to remember just how iron-fisted Greenspan's hold over the Fed was. Greenspan essentially was setting Fed policy by himself during his tenure at the Fed (at least following his brilliant moves following the crash of 87) and although Bernanke was in fact at the Fed since 2002, our housing problem was already underway by that time (even had Bernanke been able to influence Greenspan) and any likely tampering with the housing markets back in 2002 (during a recession) would have been economic disaster (I love rearview economics).