The confirmation of Ben Bernanke moved a step forward today.... the vote was 16 - 7 in favor...
But an expanding group of Senators is questioning the role of Chairman Bernanke over his role in the bailout of AIG, Goldman Sachs and European banks in September of 2008.
In the hearing two camps emerged as Senators praised and criticized the efforts of Chairman Bernanke. The praise was generally lukewarm and the criticism was heated.
Senators who want to deny Chairman Bernanke believe that the American public has been ill served while Wall Street has emerged from the crisis with only minor damages.
The belief that the central bank often favors the interests of the banking community is longstanding. These tensions are not unique to Ben Bernanke.
President Andrew Jackson abolished the Second Bank of the United States in 1832. Jackson laid out his reasons for ending the national bank in his veto message:
- It concentrated the nation's financial strength in a single institution.
- It exposed the government to control by foreign interests.
- It served mainly to make the rich richer.
- It exercised too much control over members of Congress.
Does any of that sound similar to the circumstances we find ourselves in today with the Federal Reserve?
We won't have another Jacksonian - Congressional crisis because President Obama is standing firmly behind Ben Bernanke and the expansion of the authority of the Federal Reserve.
But the people of America know in their hearts that something is out of balance when global banks get bailed out at their expense but no one is requiring mortgage modifications or increasing small business lending.
The response of our government to the woes of the banks is of a much different caliber than their response to the distress of the people. Repairing the financial system and keeping the bond markets content is the number one priority of the Bush and Obama administrations... but does this serve the Republic?
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Senators Bunning, DeMint and Vitter see the circumstances around the AIG bailout as murky. And they tried to halt the Committee from voting today until more details can be brought forward to judge the actions of Chairman Bernanke.
Louisiana Senator Vitter argued that is was not appropriate for the Committee to vote without having had access to the documents requested from Chairman Bernanke and the Federal Reserve.
These documents have been seen by some Banking Committee staff at the Federal Reserve.
But the staff of individual Senators have been denied access to these documents and believe that they have a responsibility to review the information related to these cash transfers to Goldman Sachs and foreign banks.
Chairman Dodd said that he had spoke to former staff of past Chairman Sarbanes to understand what the rules of the Senate were in relation to assessing documents from the Federal Reserve. He explained that both he and Ranking Member Shelby had signed a request for their staff to see the documents at the Federal Reserve related to the payment to AIG's counterparties on collateral calls. This payment was $62.5 billion.
Chairman Dodd and Ranking Member Shelby stated that staff should be able to see these documents. Chairman Dodd said that he didn't want any staff member being denied access although he didn't know specifically what the requested documents were.
Read more here at Shopyield...
Vote count for Chairman Bernanke --- Yes - 16 No - 7
Majority
Christopher Dodd, Chairman, Connecticut Yes
Tim Johnson, South Dakota Yes
Jack Reed, Rhode Island Yes
Chuck Schumer, New York Yes
Evan Bayh, Indiana Yes
Robert Menendez, New Jersey Yes
Daniel Akaka, Hawaii Yes
Sherrod Brown, Ohio Yes (soft may change on the floor)
Jon Tester, Montana Yes
Mark Warner, Virginia - Yes
Jeff Merkley, Oregon - No
Herb Kohl, Wisconsin Yes
Michael Bennet, Colorado Yes
Minority
Richard Shelby, Ranking Member, Alabama No
Bob Bennett, Utah Yes
Jim Bunning, Kentucky No
Mike Crapo, Idaho No
Bob Corker, Tennessee Yes (soft may change on the floor)
Jim DeMint, South Carolina - No
David Vitter, Louisiana - No
Mike Johanns, Nebraska Yes
Kay Bailey Hutchison, Texas - No
Judd Gregg, New Hampshire - Yes
Update from Dow Jones: Sen. John McCain (R-Ariz) says he will vote against Chairman Bernanke.