The Senate voted to confirm Ben Bernanke as chairman of the Federal Reserve today, but it was hardly a ringing endorsement:

The 70 to 30 vote was the thinnest approval ever extended to a chairman in the central bank’s 96-year history.

The confirmation was a victory for President Obama, who had called Mr. Bernanke an architect of the recovery, but also signaled the extent to which the Fed, once little known to the public, has become the object of populist outrage over high unemployment and Wall Street bailouts.

In several hours of debate, senators said the Fed had abetted, then ignored, the housing and credit bubbles and allowed banks to keep dangerously low capital reserves and to make reckless lending decisions that ruined consumers. Some even blamed Mr. Bernanke for the falling dollar and questioned his commitment to free enterprise.

In contrast, Mr. Bernanke’s supporters were muted. Like a mantra, they said that the Fed had made mistakes but that Mr. Bernanke had helped save the economy from a far worse recession.

Eleven Democrats, 18 Republicans and independent Bernie Sanders voted against confirming Bernanke (roll call here).

Senators of both parties who opposed Bernanke said his monetary policy and poor oversight contributed to the financial meltdown of 2008. Various Democrats who voted against Bernanke said he had been too beholden to Wall Street interests.

I still think it was a mistake for Obama to nominate Bernanke for another term, but let’s hope the Fed chairman our mild-mannered economic overlord improves on the job.

UPDATE: MIT economist Simon Johnson argues that Bernanke’s reappointment was “a colossal failure of governance.” Worth a read.

SECOND UPDATE: Bleeding Heartland user ragbrai08 notes that seven senators voted for cloture (allowing the Senate to proceed to consider Bernanke’s nomination) before voting against confirming him. Here is the roll call on the cloture vote. The senators who voted for cloture but against Bernanke are Democrats Tom Harkin, Barbara Boxer (CA), Byron Dorgan (ND), Al Franken (MN), Ted Kaufman (DE), and Sheldon Whitehouse (RI), along with Republican George LeMieux (FL).

Senator Tom Harkin told the Des Moines Register and Radio Iowa today that he will vote against confirming Ben Bernanke to another term as chairman of the Federal Reserve. Radio Iowa quoted him as saying he’s “tired of being held hostage by Wall Street”:

“I just think Mr. Bernanke is going to continue the policy of The Fed of taking care of the big financial institutions and to heck with Main Street,” Harkin says.

Harkin faults Bernanke for the handling of the Wall Street bailout. “Mr. Bernanke gave away trillions of dollars of taxpayers’ money to AIG at almost zero percent interest rate, and then they turned around and they held their counterparties – French, Germans, Swiss and many others – harmless. They didn’t have to take a hair cut at all,” Harkin says, “They got paid off in full and yet we (taxpayers) lost trillions.” […]

“I’ve had it with being told that some bank is too big to fail and I’ve had it with being told that someone, some person is so important that we have to have that person in this position.  That’s nonsense,” Harkin says.

Looks like someone didn’t get the memo about “our mild-mannered economic overlord” saving the country. Good for Harkin.

Meanwhile, Senator Chuck Grassley told the Des Moines Register, “I think I made a decision [on Bernanke] […] But I don’t think I’ll announce it.” Grassley went on to criticize the Fed for doing too little to fight inflation, suggesting we could be on a path to hyper-inflation like we had in 1979.

With unemployment at a 26-year high, I’m surprised Grassley is so concerned about hyper-inflation. Economists, correct me if I’m wrong, but isn’t deflation a greater risk right now?

I was just reading that Janet Yellen, recently mentioned as a possible replacement for Fed chair Ben Bernanke, is considered on Wall Street to be an “inflation dove,” which means that she considers maintaining full employment to be -gasp!- “as important” as controlling inflation.

I also wonder about Brad DeLong at Berkeley. He was in the Treasury Department in the Clinton Administration. He's a free trader, which I guess is neither here nor there when it comes to monetary policy (and not necessarily bad in any case), but I like that he's an economic historian.

In any case, we strongly need someone who will put reducing unemployment tops on the list. I know, from personal experience, how unemployment can convulse a family…

Krugman's “one cheer for Bernanke” notwithstanding, I think some heads have to roll here. Any favorites to replace him?

I've heard Blinder, Yellin, and Volcker mentioned.

And at Treasury, am I wrong to dream of a team featuring Brooksley Born, formerly of the CFTC, Elizabeth Warren of the TARP oversight office, and maybe Sheila Bair of FDIC? Make Born the Treasury Secretary, Bair the Comptroller of the Currency, and Warren the head of what should be a new Financial Product Safety Commission.

Following up on the diary I posted this morning, this post compiles links to Bleeding Heartland’s coverage of national politics from July through December 2009. Health care reform was again the number one topic. I wish there had been a happy ending.

Bleeding Heartland user American007 noted not long ago that Time Magazine often gives its “Person of the Year” award to people attempting to deal with a weak economy. So it was this year, when Time’s editors laughably chose Federal Reserve Chairman Ben Bernanke:

The story of the year was a weak economy that could have been much, much weaker. Thank the man who runs the Federal Reserve, our mild-mannered economic overlord

I wish I were joking, but here’s more from Time:

The overriding story of 2009 was the economy – the lousiness of it, and the fact that it wasn’t far lousier. It was a year of escalating layoffs, bankruptcies and foreclosures, the “new frugality” and the “new normal.” It was also a year of green shoots, a rebounding Dow and a fragile sense that the worst is over. Even the big political stories of 2009 – the struggles of the Democrats; the tea-party takeover of the Republicans; the stimulus; the deficit; GM and Chrysler; the backlash over bailouts and bonuses; the furious debates over health care, energy and financial regulation; the constant drumbeat of jobs, jobs, jobs – were, at heart, stories about the economy. And it’s Bernanke’s economy.

In 2009, Bernanke hurled unprecedented amounts of money into the banking system in unprecedented ways, while starting to lay the groundwork for the Fed’s eventual return to normality. He helped oversee the financial stress tests that finally calmed the markets, while launching a groundbreaking public relations campaign to demystify the Fed. Now that Obama has decided to keep him in his job, he has become a lightning rod in an intense national debate over the Fed as it approaches its second century.

But the main reason Ben Shalom Bernanke is TIME’s Person of the Year for 2009 is that he is the most important player guiding the world’s most important economy. His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivaled power over our money, our jobs, our savings and our national future. The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world.

Reality check: Bernanke has no plan to deal with unemployment, even though the “Federal Reserve Act dictates that one of the founding directives of the Federal Reserve is to ‘promote effectively the goals of maximum employment.’”

But Bernanke is wild about cuts to Social Security and Medicare. Hooray for our “mild-mannered economic overlord”!

The Senate Banking Committee votes on Bernanke’s renomination tomorrow, and he is expected to pass. However, three senators have said they will put a hold on his renomination when it reaches the floor.

I agree that the current recession could have deepened without the federal stimulus bill, especially if we had imposed the federal spending freeze Republicans wanted. But the stimulus should have been larger and better targeted toward job creation. Bernanke doesn’t favor any additional federal stimulus to create jobs. He shouldn’t even get another term at the Fed, let alone “Person of the Year.”