Congressman Cleaver Questions the New Chairman of the Federal Reserve
Congressman Cleaver Questions the New Chairman of the Federal Reserve
February 15, 2006
Financial Services Committee sizes up Chairman Bernanke as he takes over for Alan Greenspan
(Washington, DC)Chairman Ben S. Bernanke made his first Congressional appearance since being sworn in on Monday, February 6 2006 to his first four-year term as Chairman of the Federal Reserve Board of Governors. Chairman Bernanke appeared before the House Financial Services Committee for his first semi-annual report to Congress. Chairman Bernanke replaces the retiring Alan Greenspan.
Congressman Cleaver, a member of the exclusive House Financial Services Committee congratulated the new Chairman on his appointment and encouraged a bi-partisan approach to monetary policy, "I hope what is begun here today will lay the foundation for a productive relationship between you and my colleagues on the Committee -- a relationship that doesn't promote one partisan agenda over another, but instead, one that will benefit the American people and their well-being as the Fed carries out it's critical Congressionally mandated goals of promoting maximum employment, stable prices, and moderate long-term interest rates."
The Committee was anxious to hear if the new Fed Chairman would follow in the ways of his predecessor. Interpreting what Chairman Greenspan was saying became an art that, depending on the interpretation, would send the markets sailing or crashing. Wednesday's hearing was the first chance for Congressman Cleaver, not only to take measure of the new Chairman's manner as it differs from Greenspan's, but to begin to understand his approach to conducting monetary policy.
Perhaps the most obvious change was, in fact, his delivery. Greenspan was famously cryptic in his delivery, to the point where he would occasionally laugh at what he had just said - or avoided saying - but Chairman Bernanke by comparison was quite different, even direct.
"I found him straight forward and forthright in his testimony. It was a good start. I am still worried about where monetary policy is headed. He didn't answer my questions and concerns about our debt held by foreign nations. People don't realize that $256.7 billion of our debt is held by China. And just like any loan, China can call in that note at any time. I asked Chairman Bernanke if he was worried about that fact. I think he recognizes the risk, but did not recommend a solution. He did say that if those nations holding our debt decided to raise the rates they are charging, it would be an 'uncomfortable adjustment' for our nation," Cleaver said after the hearing.
"Contrary to Chairman Bernanke's testimony, our economy is not working for working Americans. The middle class is shrinking instead of growing, and we seem far more concerned about boasting the incomes of the wealthiest Americans, while denying our responsibility to those struggling to make ends meet." Cleaver added, "We can not sustain this position. We are borrowing to pay for our tax cuts, the war effort, and Katrina recovery. It is an unfair burden we are leaving our grandchildren. My hope is that we can work together, across party lines, with the Chairman to develop more sustainable economic practices."
http://www.house.gov/apps/list/press/mo05_cleaver/CleaverQuestionsNewFedReserveChair.html