Romney Wants Bernanke to Go but One of His Top Advisers Doesn’t Seem to Agree
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He's been chairman of the Federal Reserve since February 2006, appointed by President George W. Bush and reappointed by President Barack Obama.
Some say Ben Bernanke helped to save the U.S. economy during the financial crisis that hit just months after he took over leadership of the Fed. Others say his policy of zero interest rates has failed to revive an economy which continues to grow too slowly to push unemployment below g 8 percent while hurting the dollar and stoking inflation.
Mitt Romney is in that camp, and yesterday he announced for at least a second time that he would replace Fed Chairman Bernanke if he won the presidency. Just two days before Glenn Hubbard, one of Romney's top economic advisors, said Bernanke should "get every consideration" to stay on at the Fed.
Romney "can't fire the Fed chairman" says Jim Bianco, president of Bianco Research, a financial research firm, "but he can choose to not reappoint him when his term ends." Bernanke's term ends on January 31, 2014.
Romney told Fox News this week that the Fed's bond-buying program under Bernanke, known also as quantitative easing, had not been "terribly effective" and he didn't support the Fed extending the program.
"Romney wants somebody like John Taylor (Stanford University economist) who would be more anti-quantitative easing, anti-accommodation….so that this period of extreme monetary policy would come to a close" Bianco says.
The Fed has maintained a zero interest rate policy since late 2008 and has run two programs of quantitative easing. In the minutes of its last meeting, released earlier this week, the central bank board suggested more strongly than before that it could take additional action to revive the economy.
The minutes said that "many members judged that additional monetary accommodation would likely be warranted fairly soon" unless new data suggested "substantial and sustainable strengthening " of the recovery.
Bianco told The Daily Ticker's Aaron Task," "The odds of him (Bernanke) moving in September are higher than moving in October," so close to the election.
Ben Bernanke speaks in Jackson Hole, WY next Friday and the Fed policy makers meet again on September 12.
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