Oak Bluffs, MA — President Barack Obama announced Tuesday he wants to keep Ben Bernanke on as Fed chairman, saying Bernanke shepherded America through the worst economic crisis since the Great Depression.
“Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and out-of-the-box thinking that has helped put the brakes on our economic free fall,” said Obama, with Bernanke standing by his side. “Almost none of the decisions he or any of us made have been easy.”
Obama made the announcement while on vacation on the island of Martha’s Vineyard off the coast of Massachusetts after aides said initially that the president intended a news-free week there.
Bernanke, 55, is credited with turning the economy away from its deepest and longest recession since the 1930s. Now he faces the challenge of meeting White House expectations to chart the full economic recovery considered critical to Obama’s legacy.
In sticking with a Republican for the nation’s top banker, the Democratic president was aiming for stability at a time of continuing, though easing, crisis. The move was designed to reassure the U.S. financial sector as well as foreign central banks that the Obama administration isn’t changing course on its largely well-received approaches to the financial meltdown and overall monetary policy.
The announcement also came nearly concurrently with a piece of bad economic news. Obama interrupted his vacation to telegraph his decision just ahead of a White House report that gave more bleak assessments of the nation’s deficit picture.
Figures released by the White House budget office on Monday foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May. Moreover, the figures show the public debt doubling by 2019 and reaching three quarters the size of the entire national economy. Also Monday, analysts with the nonpartisan Congressional Budget Office projected a cumulative $7 trillion deficit from 2010-2019, more in line with the administration’s May estimate.
The White House said Obama decided on the last-minute schedule addition to help “put him more in vacation mode. ”There’s been a lot of speculation out there, and the president wanted to put it to rest,” Deputy Press Secretary Bill Burton told reporters as the presidential entourage headed from the site of the announcement to a golf course.
Bernanke’s early tenure was as complicated as the crisis facing the banks he sought to save.
The Fed chairman’s successful, although unconventional, strategy to move the economy away from recession, unlock frozen credit and stabilize spiraling financial markets depended in large part on creating radical and unprecedented lending programs. But he’s not without his detractors, and the Democratic chairman of the Senate Banking Committee, Connecticut’s Chris Dodd, immediately warned of a thorough hearing before Bernanke would be confirmed for a second four-year term.