[Congressional Record (Bound Edition), Volume 152 (2006), Part 1]
[Senate]
[Pages 367-369]
[From the U.S. Government Publishing Office, www.gpo.gov]




NOMINATIONS OF BEN S. BERNANKE TO BE A MEMBER AND CHAIRMAN OF THE BOARD 
         OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM--Continued

  Mr. BUNNING. Mr. President, I rise today to oppose the nomination of 
Dr. Ben Bernanke to be Chairman of the Board of Governors of the 
Federal Reserve. I am not one who relishes opposing President Bush's 
nominees or his policies. I have been supportive of an overwhelming 
majority of them, but I have opposed a nominee or two on a few 
occasions. This is one of those rare occurrences.
  Dr. Bernanke has an impressive resume and career. He received his 
bachelor of arts in economics in 1975 from Harvard University. From 
there he headed off to Massachusetts Institute of Technology where he 
received his Ph.D. in economics in 1979. He was assistant professor of 
economics in the graduate School of Business at Stanford University 
from 1979 to 1983 and then became associate professor of economics at 
Stanford's graduate School of Business from 1983 to 1985.
  Ben Bernanke then popped over to Princeton University. There he 
became a professor of economics and public affairs from 1985 to 1994. 
He stayed at Princeton and ultimately became chair of its economic 
department until 2002. He was then appointed to serve as a member of 
the Board of Governors of the Federal Reserve System by President Bush.
  Dr. Bernanke was then tapped as chairman of the President's Council 
of Economic Advisers and he has held that post since June of 2005.
  Of course, along with this academic and employment resume, Dr. 
Bernanke has received many honors and fellowships along the way. He has 
also published many articles on a wide variety of economic issues, 
articles relating to monetary policy, inflation targeting, 
microeconomics, central banking, and many other issues relating to 
economic and monetary theories.
  This all sounds very impressive, and it is. It is an economic elitist 
dream. For some, it can be a nightmare. I hope he does not hold too 
many of the ivory-

[[Page 368]]

towered theories of academia for real-world wisdom as he heads off to 
be the next Fed Chairman.
  I voted for Ben Bernanke in the Banking Committee and in the Senate 
to be the Fed Governor in 2002. I supported him to the Board of 
Governors at the Fed because of a private meeting we had.
  Over the years I have had some great concern about the Federal 
Reserve and the way it operates. One of my biggest concerns is that the 
Federal Open Market Committee, the FOMC, suffers from ``group think.'' 
It seems to me no one ever challenges the Fed Chairman. I rarely, if 
ever, witnessed or heard any of the Fed Governors publicly challenging 
or disagreeing with Chairman Alan Greenspan.
  Chairman Greenspan has done an admirable job during his tenure at the 
Federal Reserve. He had a difficult task. Part of his job was to 
predict the future. However, I believe Chairman Greenspan has always 
erred on the side of raising interest rates. I am not alone with this 
opinion. History has shown he has made many mistakes in raising rates 
for too long. My problem is when he did that, not one Governor raised 
their voice. Instead, they either bit their tongue out of fear they 
would be viewed as not a team player or perhaps what might be worse is 
that they all agreed with each other and simply reinforced bad ideas.
  Diversity of thought and dissension is, indeed, necessary within the 
Federal Reserve. After all, the Chairman of the Fed and its Board of 
Governors essentially have the greatest power over shaping our economy. 
And the economy affects every American.
  I understand the argument that to have an FOMC rife with dissension 
might not be the best for the markets. I have heard the argument that 
it would rattle the markets and send Wall Street into a tizzy. Yes, 
overall, it is important the FOMC speak with one voice. However, the 
pendulum can swing too far from dissent. My fear is that the FOMC under 
Chairman Greenspan has arguably suffered from group think and that the 
FOMC has unintentionally become a rubberstamp for Chairman Greenspan's 
recommendations.
  We need an FOMC that is truly independent. It must be independent 
from the Congress and the executive branch. We cannot have a Fed that 
is influenced by the President. We certainly know the Fed does not pay 
any attention to Congress. For the FOMC to function properly, its 
members must challenge the Chairman. No Chairman should be able to 
dominate. There must be intellectual sparring so all members are heard 
and the FOMC can come up with the best decision for the country.
  The Federal Open Market Committee needs independent voices. Dr. 
Bernanke promised me he would be an independent voice as a member of 
the FOMC. He promised me he would stand up to the Chairman if he 
thought he was being rolled. Sadly, I have not seen very much evidence 
of him being independent. I never saw him vote, not once, against the 
Chairman. I never, ever saw him challenge the Chairman. And as far as I 
can tell, they never had a disagreement.
  As important as it is for the FOMC member to be independent, it is 
more important the Chairman be independent. The Fed Chairman must not 
give in to outside pressures. Monetary policy decisions must be made 
for the good of the country and not for political considerations. When 
Dr. Bernanke was a Fed Governor, I did not witness him showing 
independence from the Chairman at all. During his tenure as a Fed 
Governor, there were 23 votes taken by the FOMC committee. Not once did 
Dr. Bernanke vote against Chairman Greenspan. I don't think that is 
independence; that is group think. He did not show independence as a 
Fed Governor. How can we be sure he will be an independent person as 
Chairman of the Fed?
  The pressures to go along for a quick political fix will be even 
greater. Will he stand up to the President? Will he stand up to the New 
York Times, the Washington Post, the Wall Street Journal? Will he stand 
up to the business and economic pundits in the broadcast media or 
anyone else when they call for rate increases or decreases? I am not 
convinced he will. The past is prologue. I hope I am wrong.
  It is mainly for this reason that in 2005 I opposed his confirmation 
as Chairman of the President's Council of Economic Advisers. I hope Ben 
Bernanke proves to be a fine Chairman of the Federal Reserve. I hope he 
uses his vast knowledge of our economy to make correct monetary policy 
decisions. I hope he gains the trust of Wall Street, much like the last 
two chairmen.
  Dr. Bernanke has talked about bringing more transparency to the Fed. 
I hope he does this. I hope he continues to be plain spoken.
  One other reason I oppose Dr. Bernanke is because he says he will 
continue the policies of Chairman Greenspan. That does not sit well 
with me. I hope this is not completely true. I hope Ben Bernanke 
refrains from talking about things outside the purview of the Federal 
Reserve. One of my biggest problems with Chairman Greenspan was that he 
talked about everything under the sun: tax policy, trade deficits, 
budgets, fiscal policy, the Nation's oil patch. The Fed's jurisdiction 
is narrowly scoped to monetary policy, but if you asked Chairman 
Greenspan about monetary policy, he would talk about everything under 
the Sun without ever answering your questions. If you asked him 
something that had nothing to do with monetary policy, he was more than 
happy to give you a clear and concise answer. Hopefully, Dr. Bernanke 
will be a different kind of chairman in that respect. Hopefully, he 
will talk only about monetary policy and not interfere with tax and 
fiscal policy. Those matters should be left to the legislative branch 
and other areas of the executive branch.
  Also, Chairman Greenspan's problems were not just the fact that he 
talked outside the monetary policy arena. Yes, Chairman Greenspan's 
tenure held relatively low inflation with growing economic conditions. 
However, his record came about from the creation of a fat market bubble 
that ultimately popped. Then there was a housing bubble. It led to an 
unbalanced economic recovery fueled by cash raised from soaring home 
prices. This resulted in record household debt and negative consumer 
savings rates.
  We also witnessed the endless bailouts of Chairman Greenspan. There 
was the 1997 Fed bailout of the Asian crisis. There was the long-term 
capital management bailout in 1998. We had a financial crisis and the 
Fed got involved with Mexico and all this led to a huge trade and 
Federal budget deficits. This was all further affected by record energy 
prices which raised the cost of goods and services.
  After almost 20 years, Chairman Greenspan is now acknowledging some 
of the bad consequences of his decisions. He said inflation may be 
creeping in. But Chairman Greenspan leaves knowing that his mess will 
fall to his apprentice, Ben Bernanke.
  Yes, Dr. Bernanke has an impressive resume. But the question is 
whether he knows what is waiting for him around each economic corner. 
It is indeed ironic that Dr. Bernanke finds it necessary to continue 
the Greenspan policies. I hope this is not true. This would be 
disastrous. These policies have not been the best for our economy.
  I hope Dr. Bernanke does not follow too closely in the footsteps of 
Chairman Greenspan in his approaches. But regardless, he just might 
inherit a mess from Chairman Greenspan. If so, I hope he can clean it 
up.
  I hope there is no damaging recession or financial crisis looming. If 
so, I hope Ben Bernanke does not live up to his nickname of 
``Helicopter Ben,'' and throw the U.S. mint's printing presses into 
overdrive.
  I have no personal qualms with Dr. Bernanke. We simply differ on 
opinions. I do not relish opposing President Bush's nominees. But, 
regretfully, I must oppose Dr. Ben Bernanke to be Chairman of the 
Federal Reserve.
  Mr. President, I ask unanimous consent that I be recorded as being 
opposed to Ben Bernanke's nomination upon its approval.
  The PRESIDING OFFICER. Without objection, it is so ordered.

[[Page 369]]


  Mr. BUNNING. Mr. President, I yield the floor and suggest the absence 
of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SHELBY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SHELBY. Mr. President, I yield back the remainder of my time.
  The PRESIDING OFFICER. The Senator yields back his time.
  Does the Senator from Kentucky yield back his time?
  He does.
  The question is on Calendar No. 440. The question is, Will the Senate 
advise and consent to the nomination of Ben S. Bernanke, of New Jersey, 
to be a member of the Board of Governors of the Federal Reserve System?
  The nomination was confirmed.
  Mr. SHELBY. I move to reconsider the vote.
  Mr. BUNNING. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The question is on Calendar No. 441. The 
question is, Will the Senate advise and consent to the nomination of 
Ben S. Bernanke, of New Jersey, to be Chairman of the Board of 
Governors of the Federal Reserve System?
  The nomination was confirmed.
  Mr. SHELBY. I move to reconsider the vote.
  Mr. BUNNING. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. SHELBY. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. WYDEN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Coleman). Without objection, it is so 
ordered.
  Under the previous order, the President will be immediately notified 
of the Senate's action.

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