If the Federal Reserve chairman falls in the forest and everyone is around to hear...
There's a lot of annoyance among liberal bloggers (and tweeters) that the White House is making strong statements in support of Ben Bernanke's renomination even as they've been vague on the next steps for health care. I'm similarly annoyed at their abdication on leading the health-care reform conversation, but I'm a bit more sympathetic on Bernanke.
The White House thinks a lot about downside risk. Nationalization might have had the opportunity to be better policy than muddling through, but if it went wrong, everything would blow up. Similarly, there's a good argument for nominating someone more concerned with employment, but if a bad election and some congressional opposition force them to let go of Bernanke and then the markets freak out and the Republicans hold up the new Federal Reserve nominee which further circumscribes the Federal Reserve's ability to act and further unsettles the markets, that could be a seriously bad scene.
This would all be much easier if the White House had decided not to renominate Ben Bernanke months ago. But reversing course amidst a fragile economy at a moment when Republicans are finding their voice (and their votes) against the Obama team's economic agenda? You can see what keeps the White House awake at night.
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