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Romney reaffirms he wouldn't reappoint Bernanke as Fed chair

August 24, 2012|By Jim Puzzanghera
  • Federal Reserve Chairman Ben S. Bernanke, center, attends a baseball game between the Washington Nationals and the Philadelphia Phillies on Aug. 2. Republican presidential candidate Mitt Romney has made it clear that if elected he will not reappoint Bernanke when his term as chairman ends in early 2014.
Federal Reserve Chairman Ben S. Bernanke, center, attends a baseball game… (Carolyn Kaster / Associated…)

WASHINGTON -- If Republican presidential candidate Mitt Romney is elected president, Federal Reserve Chairman Ben S. Bernanke might have a lot more time to watch his beloved baseball.

Romney has made it clear that he would not reappoint Bernanke when his term as chairman ends in early 2014.

Romney reaffirmed his view after a top economic advisor to his campaign said this week that Bernanke has done a good job and should be considered for another term.

“I would want to select someone who was ... a new person to that chairman’s position, someone who shared my economic views, that I thought was sympathetic to the needs of our nation," Romney said in an interview Thursday with Fox Business.

"I want to make sure that the Federal Reserve focuses on maintaining the monetary stability that leads to a strong dollar, and confidence that America is not going to go down the road that other nations have gone down to their peril,” he said.

Romney also said he's not a big fan of the Fed's efforts under Bernanke to stimulate the economy and would oppose another round of bond-buying, which the central bank is considering to help boost the sagging recovery.

Bernanke defended the Fed's actions in a recent seven-page letter to Rep. Darrell Issa (R-Vista). The Times obtained a copy of the letter Friday, as did other news organizations.

Asked by Issa if further bond buying, known as quantitative easing, could cure the sluggish growth rate and high unemployment, Bernanke said, "There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery."

In the letter dated Tuesday, Bernanke reiterated the Fed's recent statement that it would closely monitor the economy and take action if necessary.

Bernanke is a registered Republican who was first appointed Fed chairman in 2006 by Republican President George W. Bush. In 2010, President Obama reappointed Bernanke to a second four-year term as chairman despite some strong opposition from both political parties.

More Republicans have been angered by the Fed's unprecedented steps under Bernanke to deal with the financial crisis and deep recession. Rep. Ron Paul (R-Texas), who battled Romney for the Republican presidential nomination, built his campaign around dismantling the Federal Reserve, which he said is "dishonest, immoral and unconstitutional."

Romney hasn't gone that far, but clearly has not been a fan of Bernanke.

It was surprising then when Glenn Hubbard, a former top economic aide to Bush who now is advising Romney, praised Bernanke and said he "should get every consideration" for another term.

"I think Chairman Bernanke did an excellent job in the aftermath of the financial crisis," Hubbard said on Reuters TV, adding that the Fed's innovation in finding ways to deal with the crisis was "very good."

Hubbard said the Fed "politicized itself" in taking on a larger regulatory role, which "probably offended many in the Congress," but overall Bernanke has performed well.

"You have to give Ben Bernanke and the Fed high marks for much of their actions," Hubbard said.

But Romney doesn't agree. He criticized the Fed's stimulative bond-buying and said another round is "the wrong way to go."

Romney said he's worried that such a move, which could come as soon as the Fed's September meeting, carried inflation risks and would harm the dollar's value.

As for a replacement for Bernanke, Romney said he'd consider Hubbard, as well as another of his top economic advisors, Greg Mankiw. Both are respected economists who have been mentioned as possible Fed chairmen.

But Romney said it's too soon to think about that.

"I haven’t considered a single person at this point," he said.

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