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View Full Version : WSJ-More Proof that Ron Paul's Message is Getting Heard




bobbyw24
12-03-2009, 08:49 AM
A year ago, very few political observers would have imagined that Rep. Ron Paul (R., Texas) could have generated a powerful majority of support for a bill to audit Fed policy.

Bernanke’s Two Magic Numbers: 60 and 16

Later this morning, Ben Bernanke begins the uncomfortable process of trying to convince lawmakers that he deserves a second term as Fed chairman. He is widely expected to be confirmed. But the hurdle got a little higher yesterday, when Vermont Sen. Bernie Sanders (I., Vt.) threatened to hold up a vote on the Senate floor of the confirmation. If Mr. Sanders follows-through with his threat, Mr. Bernanke would need 60 votes to overcome the block and be confirmed. It’s not clear Mr. Sanders will carry out the threat, and it looks like Mr. Bernanke will get the votes he needs even if Mr. Sanders does carry out the threat. But nothing is certain these days. A year ago, very few political observers would have imagined that Rep. Ron Paul (R., Texas) could have generated a powerful majority of support for a bill to audit Fed policy.


Tom Gallagher, a savvy economic policy analyst with the ISI Group, notes that the other magic number for Mr. Bernanke is 16. That’s how many ‘no’ votes were tallied against Paul Volcker when he was up for a second term at the Fed in 1983, the most in any confirmation vote for a Fed chairman in the Senate in the past 30 years. Alan Greenspan — who was largely pampered by lawmakers when he was Fed chairman but is now the object of growing ridicule for low-interest rate and hands-off regulatory policies, never got more than seven ‘no’ votes.

As Mr. Gallagher notes, Mr. Bernanke is almost certainly going to top that number of 16 ‘no’ votes, another shot at the prestige of the Fed chairmanship, and a challenge for Mr. Bernanke as he enters a very difficult period. Lawmakers want to curtail the Fed’s powers and increase oversight of the central bank. Mr. Bernanke needs all of the authority he can muster to keep the Fed itself from emerging from the crisis a weakened institution. (Though some would argue it should be weakened.) Moreover, the Fed could be forced to make tough decisions about raising interest rates some time next year (more likely later than sooner), something that is bound to be unpopular on Capitol Hill.

http://blogs.wsj.com/economics/2009/12/03/bernankes-two-magic-numbers-60-and-16/