Bernanke Endorses Obama

There was a time when Fed chairmen feared to even seem political.

Ben Bernanke apparently wants four more years as Federal Reserve Chairman. At least that’s a reasonable conclusion after Mr. Bernanke all but submitted his job application to Barack Obama yesterday by endorsing the Democratic version of fiscal “stimulus.”

[Review & Outlook] AP

Ben Bernanke.

While the Fed chief said any stimulus should be “well targeted,” even a general endorsement amounts to a political green light. Mr. Bernanke certainly knows that Mr. Obama and Democrats on Capitol Hill are talking about some $300 billion in new “stimulus” spending, while President Bush and Republicans are resisting. And by saying any help should “limit longer-term effects” on the federal deficit, he had to know he was reinforcing Democratic opposition to permanent tax cuts.

Mr. Bernanke could have begged off — and would have been wiser to do so — given how much the Fed has already made itself a political lightning rod with its many Wall Street interventions. He might also have thought twice about endorsing one party’s policy preferences a mere two weeks before Election Day given his obligation to preserve the Fed’s independence. We can remember when tougher Fed chairmen used to refrain from adjusting interest rates close to an election for fear of seeming to be political; they would never have dreamed of meddling in campaign tax and spending debates.

Perhaps Mr. Bernanke’s blunderbuss political intrusion will win him more Democrat friends, and maybe even Mr. Obama’s goodwill. To the rest of the world, he has harmed the Fed and made himself less credible.

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