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Socialist Sen. Bernie Sanders stalls renomination of Fed Chairman Ben Bernanke

December 3, 2009 |  8:56 am

Vermont Sen. Bernie Sanders, the only socialist in Congress

Bernie Sanders has described himself as a democratic socialist. In 18 years in the House, he was the only independent, although he caucused with the Democrats. He opposed resolutions authorizing war in Iraq in 1991 and 2002 and demurred from impeaching George W. Bush only because he deemed it impractical with Republicans running Congress.

This week, he announced that he would put a hold on Federal Reserve Chairman Ben Bernanke's nomination by President Obama for a second term. Bernanke is often credited for negotiating the economy through perilous shoals, but many in Congress -- spurred by populist anger over Wall Street's excesses -- have their knives out for the Fed chairman.

“If the taxpayers of this country have spent $700 billion bailing out Wall Street because they are too big to fail, why is it that three out of the four largest financial institutions today are bigger than they were before the bailout?" Sanders asked Bernanke in a hearing last March. "Why is it OK that four large financial institutions write half the mortgages, two-thirds of the credit cards in this country and control 40% of the deposits. The bottom line to me is that the middle class in this country is collapsing. … We have seen this trend downward for many, many years. We need a new direction.”

Experts say that Sanders' move -- the prerogative of a single senator seeking to stop any action in its tracks -- is expected to slow but not derail Bernanke's confirmation. What it is more likely, they add, is that the Vermont senator could add political wind to efforts to force the Fed to open its books to public scrutiny.

"He's going to get battered, beaten and bruised at these hearings, but ultimately, Bernanke should get the votes he needs to return to the helm of Fed," Financial Dynamics executive Travis Larson told the Washington Times.

Asked about whether the Fed did an adequate job of supervising banks whose spending was off the tracks, Bernanke, noting that Bank of America is paying back its TARP money, said, "Did we do everything we could? Absolutely not," but "if you fight a battle and lose the battle, does that mean you never use an army again?

-- Johanna Neuman

Photo: Sen. Bernie Sanders of Vermont. Credit: Getty Images

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