I’ve been holding out some kind of vague hope that Ben Bernanke’s confirmation hearings might provide a way out of our political impasse on the jobs front. After all, Bernanke’s job is to try to achieve as close to full employment as is possible consistent with the goal of price stability. The Federal Reserve, not the elected officials in Congress and the White House, is the public institution with the largest influence over employment levels. And right now employment levels are very low indeed. So at his hearings either Bernanke might publicly discuss his determination to do more to lower the unemployment rate, or else he might confess his lack of confidence in the ability of monetary policy to do more to lower the unemployment rate and call for more fiscal measures.
But he didn’t do either. Instead, as David Dayen recounts, he just said we should cut Social Security benefits to reduce the long-term deficit even though this clearly had nothing one way or another to do with the current labor market situation:
No second stimulus, no jobs bill, no public investment to deal with the worst hiring crisis since the Depression, no relief for a jobless recovery, but yes to cutting people’s meager Social Security benefit and their health care in their old age.
And this is what he’s saying when he WANTS his job back. What will it be if he gets it?
And there’s the rub. It’s good that we don’t have congress driving monetary policy from the backseat. That’s why the Fed Chairman serves a fixed term. But this is still a democracy, which is why the terms have ends. And we need a Fed Chairman who’s not willing to accept a years-long period of high unemployment.