Sen. Richard Shelby, R-Ala., says he opposes a second term for Federal Reserve Chairman Ben Bernanke because of the central bank’s incompetent performance during the financial crisis.
“As you look back at the actions the Fed took as a regulator, they were almost nonexistent,” Shelby told CNBC.
“They were the regulators of the holding companies – most of the big banks that got in trouble. They didn’t regulate. They weren’t involved.”
As a result, “I believe we need to send a message,” Shelby said.
“I don’t know if we’ll send a message just by a lot of negative votes or we’ll block this. I haven’t counted votes.”
Most vote counts indicate that Bernanke will be confirmed, but Shelby expects him to at least receive the most negative votes of any Fed chairman in history.
Shelby acknowledges that rejection of Bernanke may hurt stocks.
"If he was rejected or were to withdraw, would the markets go down?” Shelby asked. “Maybe temporarily. But they’ll also go up.”
Most mainstream economists support Bernanke, though they acknowledge that he has made mistakes.
Dallas Fed President Richard Fisher says Congress’ attack on the Fed chairman represents an effort to politicize the central bank.
“The impulse to use Mr. Bernanke as a political punching bag raises the specter that, instead of doing the right thing, Congress may seek to pressure the Fed to print its way out of this crisis,” Fisher wrote in The Wall Street Journal.
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