Obama: Bernanke deserves to stay

Tieless in Martha's Vineyard, the president reiterates his support for a "strong and independent Fed"

Published August 25, 2009 1:42PM (EDT)

I'm guessing that President Obama's decision to go tieless in Martha's Vineyard this morning, while announcing the reappointment of Ben Bernanke as chairman of the Federal Reserve, was supposed to signal that he was on vacation. But he didn't look all that relaxed. He looked grim and tired -- reminding me of nothing so much as the stretch of the presidential campaign in which Hillary Clinton started piling up primary wins, and everyone started wondering whether the senator from Illinois was going to make good on his fast start.

In terms of content, the president didn't make much in the way of news. He congratulated Bernanke for the "bold, persistent experimentation that has brought us back to the brink" but noted that "we are a long way away from completely healthy financial systems and a full economic recovery."

One oddity: Both the president and Bernanke made the required lip service endorsement of a "strong and independent Fed." Bernanke even thanked the president for his "unwavering support of a strong and independent Fed. " The phrase is a required sop to the financial markets, which get uneasy at the specter of Congress or the White House setting interest rates for political reasons. But after a couple of years in which the Fed and Treasury, for all intents and purposes, acted as one entity, the endorsement rings a bit hollow.

And as Bloomberg News reported last night, "Under a regulatory overhaul proposed by the Obama administration, the Fed would need the Treasury Department's approval before invoking emergency powers used in bailouts and loans to nonbank financial institutions."

That doesn't sound particularly independent to me.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Bank Bailouts Barack Obama Ben Bernanke Federal Reserve How The World Works U.s. Economy