If Ben Bernanke is not reconfirmed by the Senate this week to another four-year term as chairman of the Federal Reserve, then the stock market will be sent into a tailspin so dire that it is likely our children, and their children, will all work as chimney sweeps in the ensuing century of Dickensian poverty.
If a left-right coalition of 40 Senators blocks his confirmation, then it's hard to see what other candidate would be more to their liking. You'd have gridlock. But Bernanke's term as a member of the Fed's Board of Governors is actually a 14-year term that doesn't expire for a long time. Consequently, the same Open Market Committee that's making decisions right now would just go on making decisions. Bernanke would, however, be unable to perform the formal responsibilities of the Chairman, so that role would devolve to Donald Kohn, the Vice Chair.
The truth is, functionally, that defeating Bernanke might not change that much in terms of Federal Reserve policy. However, it would still have some positive effects, including sending a strong message, opening up the possibility for change at the Federal Reserve and, as I discuss in the extended entry, empowering the left-wing of the Democratic Party in the Senate.
If Bernanke is defeated, it will be because around ten progressive Senators joined with most Republicans. Such Progressive - Republican alliances are pretty rare, but successfully forging one would be big news. Back in June during the fight on including IMF funding in the Afghanistan war supplemental, Representative Dennis Kucinich put some perspective on how rare these alliances actually are:
The GOP is also objecting to the inclusion of IMF money in the war bill. Kucinich recalled that the last time progressive Democrats joined with Republicans to defeat a Democratic agenda item came in 1999, when 26 Democrats sided with Republicans to block President Clinton's continuing bombing of Serbia.
"Republicans had their own agenda," recalled Kucinich.
Over the summer, we tried this Progressive Block strategy to get a public option in the health care bill. When the moment of truth came, and the public option was stripped from the bill, the strategy collapsed. This was largely the case because the health care bill is a very high profile piece of legislation, and there was insufficient support among rank and file Democrats for defeating the bill because it didn't go far enough.
Bernanke, however, is neither high profile (despite winning Time's Person of the Year), nor does he have a base of support among rank and file Democrats. In terms of visibility, fully 41% of the country has no opinion on Bernanke's job performance, and 39% have no opinion on his reappointment. Further, only 21% of the country supports his reappointment, so, unlike the health care bill, he does not have a particularly large base of support among Democrats.
This means Bernanke is an instance where progressive members of Congress can actually defeat something the Obama administration wants, and face no negative repercussions from the Democratic and progressive base that still largely approves of President Obama and the direction of the party. As such, it is a perfect instance for progressive Senators to show they mean business and actually stop something the Obama administration wants. If progressives in Congress make it clear they are willing and able to block something the administration wants, this could have a ripple effect into other areas of legislation, including forcing the Senate to pass a fix to the Senate health care bill through the 51-vote reconciliation process.
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