Federal Reserve Chairman Ben Bernanke won Senate confirmation Thursday to a second term at the helm of the central bank. Critics arrayed themselves against Bernanke, but the Senate rejected a filibuster aimed at blocking his reappointment and quickly approved his renomination by a vote of 70-30.
"Bernanke fiddled while our markets burned," said Sen. Richard Shelby, R-Ala., voicing a common complaint that Bernanke did not detect the coming crisis and failed to rein in the banking industry.
His supporters argued that once the crisis was upon him he used aggressive and creative measures to bring stability to the financial system.
"He has kept a steady hand on the tiller in a perfect economic storm," Sen. Robert Menendez, D-N.J., said.
No Fed chairman nominee has been rejected by the Senate.
The stock market has been rooting for Bernanke. The Dow Jones industrial average plunged last week amid news of mounting opposition, then recovered when his prospects brightened.
The Fed wields enormous power over American pocketbooks. It has the power to set interest rates that influence economic activity, employment and inflation. And it helps maintain economic stability by making emergency loans to banks when they can't get cash elsewhere.
Widely credited with avoiding a financial catastrophe, Bernanke has angered the public and lawmakers with his support of Wall Street bailouts — especially the $182 billion rescue of insurance giant American International Group Inc. The criticism has mounted as unemployment has risen to double digits and banks paid out huge bonuses to their executives.
"He was asleep at the switch while Wall Street became a gambling casino," said Sen. Bernie Sanders, a Vermont independent who was among the opposition.
The biggest challenge facing the Fed this year will be how and when to reverse course and raise interest rates. To foster the recovery, the Fed on Wednesday kept interest rates at a record low and pledged to hold them there for some time.
Sanders stopped short of conceding that Bernanke would be confirmed, but he said the close tally would send a message to President Obama.
The confirmation fight and the attacks on the Fed have become a test of central bank independence. The Fed jealously guards its autonomy as a crucial element for carrying out monetary policy, even if it isn't popular with politicians.
Bernanke, 56, was first tapped by President George W. Bush to run the nation's central bank. Obama picked him for a second term in August. His term expires Jan. 31.
Most of his professional career was in academia. He spent 17 years teaching economics at Princeton.
Bernanke came to Washington to take a job at the Federal Reserve, working with then-Chairman Alan Greenspan. Bush selected him to be his top economist. After that, he went on to run the Fed, starting in 2006.
This program aired on January 28, 2010. The audio for this program is not available.