The first indication that this was inaccurate occurred during Bernanke’s reappointment as Fed Chairman in 2009. The media tried to claim that Bernanke was the savior of capitalism, but the fact of the matter was that there was strong opposition to his re-appointment. After all, Bernanke had not only missed the crisis but had in fact repeatedly stated it was contained.
From a competence perspective, Bernanke should not have been reappointed. He had an abysmal track record and had in fact allowed the entire financial system to nearly implode. Small wonder then that numerous members of Congress were against his reappointment.
During this period, an intense lobbying effort was made on Bernanke’s behalf. Lost amidst the bustle of articles concerning this situation was the following tidbit:
I was advised that rejecting [Bernanke's] nomination would cause markets to nose dive, which would hurt retirees and families saving for their future. I am not enthusiastic in my support. " - Senator Barbara Mikulski (D- MD)
Here is a US Senator who was advised that not reappointing Bernanke would mean a collapse of the markets. The argument was financial in nature, but it is clear that the Fed was no longer an apolitical body. Bernanke was another political figurehead, who needed support in order to retain control.
Barack Obama reappointed Bernanke as Fed Chairman in August 2009. Obama had made a point of disparaging the Bush Presidency for leaving the US economy in shambles during his election and the initial stages of his first term. So it is of note that Obama decided to reappoint Bernanke, who, as Bush’s Fed Chairman, had been a key player in allowing the Crisis to happen.
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